Lessor’s Risk Only (LRO) Insurance
Lessor’s risk only (LRO) insurance covers an owner who leases a building to commercial tenants. It typically protects the structure and the owner’s liability for injuries to tenants and their visitors, along with loss of rents. Tenants carry their own contents and operations coverage separately, and many commercial leases require the owner to hold LRO.
If you own a building and lease it to commercial tenants, lessor’s risk only coverage is built for your role as landlord. SIA helps California owners protect the structure and the liability that comes with having tenants and their visitors on the premises.
What does lessor’s risk only insurance cover?
- Building and property coverage for the structure you own and lease out.
- Owner’s liability for injuries to tenants and their visitors on the premises.
- Loss of rents / business income when a covered loss interrupts tenant occupancy.
- Commercial umbrella for liability above your underlying LRO limits.
- Coverage coordination with the insurance requirements written into your lease.
Who needs it? Owners leasing retail storefronts, office suites, or mixed-use space; landlords whose leases require them to carry LRO coverage; investors who own a building but do not operate a business inside it; and owners adding or replacing a commercial tenant and updating requirements.
With LRO, you insure the building and your liability as the owner, while tenants carry their own contents and liability coverage for their business operations. Lease language often spells out required limits and how each party’s coverage should interlock, so it is worth reviewing before signing. As with other California property, earthquake and flood are typically excluded from the property policy and addressed separately.
How we help: We read how your lease allocates insurance responsibility, then structure LRO coverage to match, including landlord liability and loss of rents. We help you request and track tenant certificates of insurance so the coverage you are relying on stays in force.
