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Understanding Lessors Risk Insurance

    As a property owner or landlord, it’s crucial to protect your valuable investments from unexpected risks. One way to reduce potential financial losses is by getting insurance coverage custom to fit your unique needs. Lessor’s risk insurance is a policy that provides essential protection for someone who may be leasing out a property or multiple properties.

    Lessor’s risk insurance is a special policy that is designed to provide coverage for property owners who lease out their properties or equipment to third parties. It offers financial protection against property damage, liability claims, and business interruption that may occur during the period of a lease.

    Let’s break down these coverages: 

    1. Property Damage: This piece of the policy protects owners against physical damage caused by covered perils. This coverage ensures that property owners can repair or replace damaged structures, fixtures, and equipment without incurring the expense out of their own pocket.
    2. Liability: If a third party suffers a bodily injury while on the leased premises, this protects the owners from potential legal and medical costs associated with the claim, including legal defense fees, settlement payments, and more.
    3. Business Interruption: If a covered peril led to a temporary closure of the leased property, this coverage would provide loss of rental income. This will help the property owner continue to attain cash flow during the period of recovery to cover expenses such as mortgage, taxes, and maintenance costs.

    Lessor’s risk insurance is extremely important when it comes to protecting your investment by covering the costs associated with property damage, liability claims, and business interruption. Without this insurance property owners are vulnerable to facing large financial losses. Many lease agreements require property owners to maintain adequate insurance coverage. A lessor’s risk policy would fulfill these contractual obligations.

    If you’re a property owner engaged in leasing, reach out to Oxford Risk to determine a suitable insurance policy that will meet your specific needs.