You may not give your clients legal advice, but you should be aware that as the legal environment changes, so do the requirements or expectations of carriers that insure these residential rental exposures.
Here are some best practices to consider sharing:
- Confirm the tenant has their own liability insurance policy and that the property owner/client is named as an additional insured
- Make sure the limits of liability are at least $1million/$2 million
- Review the lease to confirm that indemnification and hold harmless language goes in favor of the property owner
- Confirm if the tenant has pets — dogs especially become an additional hazard to liability policies; you should consider having a very specific clause in the lease relating to ground rules for having pets
- Review your insurance policy for an animal exclusion; you should know the limitations that may be part of your coverage
- Make certain your tenant understands your “right to entry” terms and that they comply with state laws; decide to inspect your property regularly so there are no surprises
- Maintain your premises; the lease should identify the maintenance responsibilities of both you and the tenant
- Make sure the lease identifies the occupancy limits and that all tenants are named on the lease
- The lease should stipulate whether the tenant can run a business from the property
- A one-year lease is probably the best option; it allows both landlords and tenants flexibility and stability
USLI can consider many residential rental properties in our 1-4 Family Dwelling product and our Residential Condominium product. We can also consider Lessors Risk Only exposures that include mercantile and a small number of apartments. Call your underwriter for more information.
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