You do not occupy the building, so you are rated differently for it.
Lessor’s Risk Only is how a commercial landlord is classified: liability for a building you own and someone else operates from, where your exposure is the structure and the common parts rather than the business inside.
Tell us the situation.
A licensed human replies the same business day — not an auto-responder, and not five producers calling at once. We shop it across our carriers and tell you if the policy you already have is the right one.
We use this to quote and service your insurance, and we do not sell it or pass it to lead networks. Privacy policy.
What lessor’s risk businesses actually need.
Premises liability
Injury on the parts of the property you control — lobbies, stairs, lots, roofs, structure.
Without it — The areas a landlord retains are where landlord claims happen.
The building
The structure itself, at a limit that reflects rebuilding it rather than its market value.
Without it — A property valued on what it sold for is underinsured on the day it burns.
Loss of rents
The rent that stops arriving while the building is untenantable.
Without it — The mortgage does not pause because the building did.
Tenant requirements
The certificates, additional insured status and waivers your leases oblige tenants to carry.
Without it — An uninsured tenant’s claim lands on the landlord’s policy by default.
Umbrella
Excess limits above the primary, which most institutional leases and lenders require.
Without it — A single serious injury exhausts a primary limit quickly.
Where lessor’s risk shows up.
- Commercial Landlords
You are named in a tenant’s accident whether or not it was your fault.
- Mixed-Use Property
Shared stairs and entrances belong to the landlord.
What lessor’s risk operators ask us.
What does “lessor’s risk only” actually mean?
It is a liability classification for a building you own and do not occupy — the tenant runs the business, you own the structure. The rating reflects that: you are priced on the building, the tenancy type and the square footage rather than on receipts or payroll. It matters because the exposure is genuinely narrower than an operating business, so being classified as an occupant when you are a lessor means paying for exposure you do not have.
Why does the tenant’s business type change my price?
Because what happens inside your building is what burns it down and who gets hurt in it. A landlord leasing to professional offices and one leasing to a restaurant or a machine shop are priced differently and correctly so — cooking, hot work, chemicals, alcohol and public footfall all drive both frequency and severity. It also means a tenant change mid-term is worth telling us about; a unit re-let from an accountant to a nail salon has changed the risk.
The tenant has their own insurance. Why do I need mine?
Because their policy covers their operations and their property, not your building, and because you get sued regardless of whose fault it turns out to be. Defense costs land on you from the first day. What their insurance does do is transfer risk back — which is why leases should require limits you have actually specified, additional insured status naming you, and a waiver of subrogation. Collect the certificate every year rather than at signing.
How should I set the building limit?
On the cost to rebuild, not on what you paid or what it would sell for — those include land and location, which do not burn. Under-insuring also triggers coinsurance: settle at less than the required percentage of value and the insurer pays a proportion of the loss even on a partial claim. That penalty catches owners on a small fire far more often than on a total loss.
Guides on lessor’s risk.
- What Moves an LRO PriceThe rating factors that are fixed, the four worth spending money on, and the panels and materials that close the market entirely.
- Requiring Tenant InsuranceThe lease clauses to insist on, why the requirement usually comes from your own carrier, and the enforcement failure that undoes all of it.
Not ready to talk? The guides answer the questions this page raises in more depth. Already insured with us and need a certificate or a policy change? Ask the service team rather than starting a quote — it is faster and it goes to the people whose job it is. We also write home and auto, which is usually cheaper alongside the business policy than apart from it.