When managing properties or running a business, understanding the differences between Landlord Risk Only (LRO) insurance and General Liability (GL) insurance is crucial. Both serve important roles in risk management but address distinct needs.
1. Purpose and Coverage
- LRO Insurance
LRO insurance is specifically designed for property owners who lease spaces to tenants. Its focus is on protecting the landlord from risks tied to the property, such as liability for accidents occurring in common areas like stairwells or parking lots. - General Liability Insurance
GL insurance applies more broadly to businesses and organizations. It covers bodily injury, property damage, and personal injury claims related to the operations of the insured business, whether on-site or elsewhere.
2. Policyholders
- LRO Insurance: Primarily for landlords and property owners leasing space.
- GL Insurance: Designed for business owners, including tenants, who need protection from liability arising from their operations.
3. Scope of Responsibility
- LRO Insurance: Focuses on property-related risks. For example, if someone slips in a lobby of a building you own, LRO coverage would handle the liability.
- GL Insurance: Covers broader risks like customer injuries at a tenant’s store, reputational harm, or damage caused by business operations.
4. Additional Insured Clause
LRO policies often require tenants to list the landlord as an additional insured on their GL insurance. This ensures the landlord is protected from claims related to the tenant’s operations, creating a complementary relationship between the two types of coverage.
5. Premium Costs
LRO insurance premiums are typically tied to property-specific risks, such as building type, tenant mix, and location. GL insurance premiums are based on the business’s nature, revenue, and risk exposure.
Understanding these differences helps landlords and business owners choose the right coverage for their needs, minimizing financial risks while maintaining peace of mind.
