Tenant and Liability Insurance
As a landlord, you have to make sure the property that you are renting is properly insured. It does not matter if you rent the property to an individual or a business. You should already have insurance on the structure itself. When you have a standard buildings insurance policy, you are protecting yourself in case the building is completely lost due to fire or another disaster.
And just as you protect the building, the tenant should protect their belongings while they are renting the property from you. They should acquire renters insurance because it is not your responsibility to insure the contents within the building. It is their responsibility to do so.
The last thing you want to happen is for a tenant to become injured in the rental property and it be found that the injury was due to something that is your fault. You don't mean for such events to happen, but they can happen.
For instance, a creaky step on a stairway may finally break and this may cause a tenant to trip and fall down the stairs. This can result in severe injury. Because of this, the tenant may hold you liable for their medical expenses. Their claim will state that you did not do what you could to fix the step before the accident occurred. If they told you in advance that there was something wrong with the step, you may find that the tenant will have a case. If they do, you need your insurance to cover the legal costs, the attorney costs, and to pay a settlement to the individual. The settlement cannot exceed your coverage limit.
To make sure that you are not sued for an amount beyond your coverage limit, it is ideal that you have enough coverage. Simply look at cases in your state in which tenants sued their landlords for accidents and you will see what they have been awarded in such cases. This will give you an idea of what you are dealing with. That way you can make sure you have the protection you need and wont' have to pay out of pocket for any medical expenses - a similar situation to when an employee might act out of line and you would require slander and libel insurance.
There are some things that landlords are responsible for. Landlord liability insurance will take are of staircases, elevators, light fixtures, and other aspects of the building that the landlord owns that could potentially cause damage to the tenant's belongings.
If it is found that something such as a leaky pipe causes flooding that damages a tenant's belongings, you'll find that you may be held liable for this damage. The tenant can also claim this damage on their renters insurance, but not all tenants carry this insurance, although they should. As a result, they will look to you to replace their furniture, electronic items, or other belongings that were damaged by the broken pipe.
You may even consider obtaining landlord contents insurance. This is insurance in which you are able to insure your contents that are in the building. This does not protect those of the tenant since it is their responsibility to do so with renters insurance. For instance, you may have furnished apartments. This means the furniture is yours. However, the furniture pieces are not covered under usual wear and tear, but can be replaced if there is a fire or flood that destroys them.
You do assume a certain degree of risk when you rent out property. Make sure you are properly protected through tenant and liability insurance. You may think your tenants won't ever sue, but accidents do happen.