What is tenants legal liability insurance?
It’s a contractual obligation. In almost every commercial lease, landlords will require tenants to provide evidence of tenants legal liability insurance. But what is Canadian tenants legal liability insurance? The answer is that Canadian tenants legal liability insurance is no different than tenants legal liability insurance in any other geography. Ultimately, it is protection for the landlord for unintentional damage that tenants may cause to their building.
Is tenants legal liability insurance in Canada necessary?
The fine print. When entering into a commercial lease, a tenant of the landlord accepts responsibility for damage they might cause to the building during their tenancy. For comfort and certainty as well as because landlords don’t want to rely on their tenant’s balance sheet for damages that could be caused by them to their building. Landlords require tenants to provide evidence of tenants legal liability insurance via a certificate of insurance that an insurance broker, such as ALIGNED Insurance, can issue on their clients behalf.
Canadian tenants legal liability insurance coverage is not a stand alone insurance product, it is actually just one of many parts of the typical Commercial General Liability Insurance policy which is a common product that nearly every business carries.
One important thing to note is that often landlords don’t actually secure evidence that their tenants have sufficient limits as required by the lease.
Often the CGL Insurance per occurrence limit is the only limit typical insurance brokers will evidence on a certificate of insurance. However, often the tenants legal liability limit within the commercial general liability policy is considerably less. And often, it doesn’t meet the requirements of the lease or sufficiently protect the insured for their exposure.
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