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Among the different types of liability insurance is tenant liability, known in Spain as responsabilidad civil locativa.
In this post, we explain what it consists of and in which cases it is important to take out this type of policy.
Characteristics of Tenant Liability Insurance
Tenant liability is a specific guarantee that is very often included in general liability insurance. Specifically, it covers indemnities for damage that may occur to premises you have rented, whether for an ongoing economic activity or for occasional events held in the rented property.
Is This Cover Necessary?
Tenant liability is not widely known, although it is genuinely very important. When premises are rented, liability insurance is commonly required, although it is not always specified that the policy must include the tenant liability clause. As a result, the policy may be poorly arranged and may not cover damage caused to the property.
Including Tenant Liability Cover in the Policy
Including tenant liability in the policy guarantees that damage to the premises is covered, not only material or personal damage that may occur. Therefore, when renting a property for a one-off or ongoing activity, it is essential to include this cover. Its cost is minimal compared with the guarantees it provides.
Insurance policies that include tenant liability allow the insured party, as tenant of the premises or building where the activity is carried out, to cover damage that may occur. Very often, this type of damage is caused by fire, explosion or a water-related incident.
Causes of Claims
The reasons why premises may be damaged vary greatly. If you do not want to answer with your personal assets or your company’s assets for that damage, it is important to read the small print of your policy and pay close attention to what it includes. Ask for the clauses that refer to tenant liability within your liability insurance.
Another clear example is a business owner who rents premises to a music group for a concert. If, at the end of the event, the property has structural damage, for example a broken wall, the policy will need to include tenant liability in order to cover the damage.
Bear in mind that when you rent a property for a professional activity, you must respond to any incident, whether or not you are at fault. If a fire or water leak occurs, you may have to assume the cost of the damage, which is why it is essential to have good insurance that can deal with this type of claim.[/vc_column_text][/vc_column][/vc_row]