Being a property owner that rents either residential or commercial space is operating a business. This means that as a landlord you must protect yourself and your business from risks attributable to property loss, income loss and liability.
While requiring your tenant to either have renters insurance or general business liability insurance offers a modicum of insulation from these risks, it is not enough.
Coverage landlords need include:
- Property insurance
- Income replacement insurance
- Liability insurance
Property is subject to risk from many types of peril. Fire, flood, earthquakes, hurricanes, and tornadoes are some of the more common risks. Most business insurance advisors recommend that a landlord purchase a policy for each peril to insure protection is sufficient.
In the event your rental property suffers significant damage from fire or another peril you will not be able to rent it. However, property taxes and mortgage expenses may still be upcoming and if you counted on income from the property for living expenses you need to replace. This is the purpose of income replacement insurance.
Injuries to tenants, visitors and guests that occur on your property can be costly to defend. If a claim is made against you for something like failure to maintain the property and that inaction resulted in an injury liability insurance will pay for your defense if the case goes to court and the amount of the settlement or verdict up to your policy limit.