What is Lessor's Risk Only (LRO) insurance?
LRO is a commercial package for property owners who do not operate a business in the building themselves but lease space to one or more tenants. Because the tenants control their own spaces day to day, the owner's exposure is mainly the structure itself and the areas the owner controls, such as parking lots, sidewalks and common areas.
What an LRO policy can include
- Building property — the structure, roof, walls and permanently installed fixtures, with valuation options such as replacement cost.
- Premises general liability — the landlord's exposure for injuries or property damage in common areas, parking lots, walkways and other owner-controlled areas.
- Loss of rents / business income — rental income you lose while a covered loss makes the building or units untenantable.
- Wind / hurricane — included or available as an option depending on the carrier and location; in Florida it usually carries a separate hurricane or wind deductible.
- Building equipment — options for equipment breakdown (HVAC, electrical, boilers) and owner-owned equipment used to maintain the property.
- Commercial umbrella — additional liability limits above the underlying policy.
Flood is generally excluded from commercial property policies. Flood coverage is purchased separately, through the NFIP or a private flood market. See our flood insurance page or ask us to quote it alongside your LRO policy.
Coverages, limits, exclusions and options vary by carrier and property, and every policy is subject to underwriting. Your policy documents control what is covered.
Who needs Lessor's Risk insurance?
- Strip mall and shopping center owners
- Retail plaza and storefront building owners
- Office building and medical office owners leasing to tenants
- Warehouse, flex-space and light industrial owners
- Investors who own a single commercial building leased to one tenant
Tenant insurance requirements, additional insured and certificates
A well-run commercial property makes sure each tenant carries its own coverage. Typical lease requirements include tenant general liability with stated limits, naming the building owner (and your lender or property manager, if required) as additional insured, and providing a certificate of insurance (COI) before move-in and at every renewal. We can help you review what your leases require and what your tenants provide, so gaps are easier to spot. Your attorney should draft or review the lease language itself.
Why Florida commercial property needs a careful review
Florida buildings face hurricane, windstorm, hail and flood exposure. Wind or hurricane deductibles are often a percentage of the building's insured value rather than a flat dollar amount, which can mean a large out-of-pocket cost after a storm. Roof age and condition, construction type, distance to the coast and wind-mitigation features can all affect eligibility and premium. We walk through these details with you so you know your deductibles before hurricane season, not after.
Frequently asked questions
Is Lessor's Risk insurance the same as a landlord policy for a house?
No. Residential landlord (dwelling fire) policies cover homes and small residential rentals. Lessor's Risk Only is a commercial policy for buildings leased to businesses, such as strip malls, retail plazas, offices and warehouses.
Do my tenants still need their own insurance?
Yes. LRO protects you as the owner. Tenants generally need their own general liability and property coverage for their operations, contents and improvements, and most commercial leases require them to name the owner as additional insured and provide a certificate of insurance.
Does LRO cover hurricane and flood damage?
Wind and hurricane may be included or offered as an option, usually with a separate wind or hurricane deductible in Florida. Flood is typically excluded and needs a separate flood policy.
What if I occupy part of the building myself?
LRO is intended for properties that are mostly or entirely leased to others. If you operate your own business in part of the building, a different policy, such as a business owner's policy (BOP) or a commercial package, may fit better. We will help you find the right structure.
What information do I need for a quote?
The property address, year built, construction type, square footage, roof age and updates, tenant list and their types of business, current policy declarations, and any lender insurance requirements.
