Lessor's Risk vs. Landlord Insurance: What Virginia Property Owners Should Know

The short answer

Lessor's risk and landlord insurance are similar types of coverage for property owners. Choose lessor's risk for commercial space and landlord insurance for residential homes.

What is lessor's risk insurance?

Lessor's risk insurance is also called LRO or lessor's risk only. It is for people who own a building and rent space to businesses. It covers three main things:

• Building property: This is the structure and shared spaces like hallways.
• General liability: This covers costs if someone gets hurt in shared areas like parking lots or stairs.
• Loss of rental income: This pays you if you lose rent because the building is damaged.

What is landlord insurance?

Landlord insurance is a general term for rental property protection. It covers residential homes and commercial buildings. For a home, it pays for the building, liability, and lost rent. For a business, it works just like lessor's risk.

What are the differences?

The main difference is the type of property. Use lessor's risk for business buildings. Use landlord insurance for homes. Commercial policies are built for office spaces and shopping centers.

What is not covered?

Neither policy covers the things your tenants own or their business work. Tenants must buy their own property and liability insurance. Make sure your lease says who pays for tenant improvements and upgrades.

What can leave you unprotected?

• Ordinance and law: This pays for extra costs if you must fix your building to meet new local codes.
• Equipment breakdown: This covers your heaters, air units, and electrical systems.
• Flood: Standard policies do not cover floods. You need a separate policy if you are in a flood zone.

What to do next

At Trinity Solutions, we look at your leases and building details to find the best plan. We check over 30 insurance companies to find you the right price. Call (804) 944-6226 or start a quote online.