What is lessors risk only (LRO) insurance?
Lessors risk only insurance, also known as landlord's insurance, is coverage for property owners who rent out commercial space, such as apartments, office buildings, retail malls, and warehouses. It helps support both landlords and tenants by addressing certain risks tied to leasing property.
LRO insurance helps protect landlords from lawsuits if they're held responsible for injuring a tenant or their employee. This coverage can also help if you damage a tenant's property.
Progressive Commercial offers lessors risk only coverage as part of a business owners policy (BOP). You can start a quote online or speak to an expert for help choosing the insurance that meets your leasing needs.
Who needs lessors risk only insurance?
If you own commercial business property and lease space to tenants, LRO insurance may help protect your assets. In many cases, lenders require it when you apply for a commercial real estate loan. You could benefit from lessors risk only insurance if you lease:
- Retail spaces
- Office buildings
- Warehouses
- Apartment complexes
- Medical or dental offices
Many insurers expect at least 75% of the building to be tenant occupied before you get lessors risk only coverage.
Why property owners and landlords should consider LRO insurance
Landlords should consider lessors risk insurance because owning a commercial property and renting it to tenants comes with responsibilities that don't always stop at the lease. Even if you don't operate a business in the building, you can still face some risk tied to owning and maintaining the property.
For example, if your tenant's employee is injured because of loose flooring, you might face a claim because structural maintenance is up to you. Regardless of whether you're at fault, LRO coverage could help pay your legal defense costs.
Situations like this are why many landlords consider lessors risk part of their overall insurance strategy. You might also need it to meet the terms of a loan.
What does lessors risk only insurance cover?
Lessors risk only insurance protects property owners against claims tied to tenant-related incidents that happen on-site, such as in office hallways or parking lots. It can also help cover legal fees if a tenant sues for bodily injury or property damage. Typical tenant claims relate to things like:
- Slip and fall accidents
- Weather-related damage
- Fire and smoke damage
- Water damage
- Theft and vandalism
- On-site auto accidents
LRO insurance vs. other coverages
Lessors risk insurance works with other coverages on a business owners policy. Together, they help address different risks related to property ownership and tenant-run businesses. See how lessors risk fits alongside other liability and property protections in a BOP:
| Coverage |
Who's covered |
What's covered |
|---|---|---|
| Lessors risk only | The building owner | Legal costs when a tenant or their employee says a building condition caused an injury or damaged their property. |
| Liability | The building owner and the tenant (each under their own policy) | Third-party injuries and property damage that happen while visiting a tenant's business. |
| Commercial property | The building owner and the tenant (each under their own policy) | A landlord's policy can help with damage to the building. A tenant's policy covers their things, such as furniture or inventory. |
How does LRO coverage fit with commercial property coverage?
While lessors risk only coverage protects against certain tenant claims, it doesn't cover damage to your building or its contents from events like fire or wind. For that, you'll need commercial property insurance, which is typically included in a BOP.
Both landlords and renters can benefit from property coverage. A landlord's policy won't usually protect a tenant's business personal property, so renters often carry their own coverage for items like furniture, computers, equipment, and inventory.
LRO insurance vs. general liability (GL)
Lessors risk insurance and general liability both relate to injury and property damage claims, but they do different jobs.
LRO applies exclusively to your tenants and their employees. It helps you with claims or lawsuits related to how the property is maintained.
General liability coverage steps in when other people, such as customers or delivery drivers, are injured or have their property damaged. An injury tied to building upkeep may fall to you, while a claim related to how the tenant runs their store would typically be their responsibility.
Landlords often carry both LRO and liability protection together as part of a single business owners policy. You might also want your renters to carry general liability insurance or their own BOP. Requesting a certificate of insurance (COI) can help confirm they have the right coverage.
How much does lessors risk only insurance cost?
LRO insurance is usually packaged within a business owners policy. In 2025, new Progressive Commercial customers paid a national median monthly cost of $80 for BOP. The average rate was $127 per month. Your BOP cost will be unique to you. It can vary based on specific factors, including:
- Building location
- Types of tenants
- Property size
- Occupancy rate
- Building safety features
- Claims history
The best way to learn your exact premium is to get a quote. It's fast, easy, and free.
Plan for tenant risks before leasing
It's normal for different types of tenants to come with different risks. For example, restaurants can have a higher chance of fires, gyms may see more injuries, and auto repair shops use equipment that requires extra safety measures. Understanding how a tenant uses the space can help you build a leasing plan and choose coverage that fits your property.
Frequently asked questions about lessors risk only insurance
Does lessors risk only insurance cover damage to my building?
No. LRO helps protect you from tenant-related liability claims. To cover damage from risks like fire, theft or weather, you'll need commercial property insurance. This coverage is part of a BOP.
Is LRO the same as general liability insurance?
Not quite. LRO insurance protects landlords from tenant claims, while general liability covers claims from the public, like customers, clients, and vendors.
Does LRO insurance cover my tenants' property?
No. LRO only helps with liability claims against you. It doesn't cover your tenants' belongings or business equipment. To protect their own property, they'll need to carry business property insurance.
Is lessors risk only insurance required by law?
No. LRO isn't legally required, but you might still need it for a commercial real estate loan. Your lender may ask for coverage because it helps protect their investment if something goes wrong.
Why choose LRO insurance through Progressive Commercial
Owning commercial property can be a smart financial move. It allows you to build equity, earn income, and provide space for small businesses to grow. Whether you're leasing out an auto repair shop or several office units, it's important to protect your investment with lessors risk only insurance from Progressive Commercial.
Speak to one of our insurance experts about adding lessors risk only coverage to your business owners policy. Your tenants don't need to be insured by us, but they must be eligible for our BOP coverage. Call us or start a customized quote online today.
