Why Tenant Liability Policies Are a Wise Buy

Tenant liability policies are an essential form of protection designed to be flexible. They are easy to use and able to meet the contractual insurance obligations contained in most rental agreements. A tenant liability policy protects the landlord from claims or damage associated with the use of a property by the commercial tenant or clients. It may be one of the most important policies available.


In addition to limiting the liability associated with a commercial lease, many small -business owners find tenant liability coverage an especially beneficial policy for managing risk. These risks are usually associated with off-site situations. Stadiums, schools, fairgrounds, retail space and even religious centers are common venues where small-business owners may need additional liability coverage that is more competitive than a special event or monoline policy.


Tenant liability policies tend to be extremely cost-effective with premiums based on a combination of square footage, the type and construction of the facility itself, and limits of liability selected. Popular riders and addendums include special product coverage for hazardous products and liquor liability coverage, especially for tenants who sell or distribute alcoholic beverages.

Additional Considerations

There are several aspects of tenant liability coverage that should be considered when speaking with an insurance agent, including whether or not the proposed coverage satisfies lease requirements, the need for special event coverage, the value of improvements, and what limitations and exclusions may be in effect.