Insurance that covers bodily injury, property damage, and personal injury claims arising from building operations and common area use. General liability insurance premiums are routinely passed through to tenants as an operating expense.
Commercial general liability (CGL) insurance for a building covers third-party claims for bodily injury (slip and fall in the parking lot), property damage (water leak damaging a tenant's inventory), and personal/advertising injury. The policy covers the building owner as named insured, with tenants and managers often listed as additional insureds. Standard CGL policies have per-occurrence and aggregate limits. The premium is based on building size, location, claims history, occupancy type, and coverage limits.
A landlord purchases a CGL policy with $10M limits for a small retail strip center where $2M limits would be standard. The premium for the excess coverage is passed through to tenants, who pay for protection far beyond what the property requires.
Compare the CGL coverage limits and premium against industry benchmarks for your property type and size. Request the declarations page and loss runs (claims history) to verify the premium is reasonable. A building with no claims history should not be paying a premium that assumes high risk.
Worried about general liability insurance in your lease?
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Find My OverchargesThis page provides general educational information. It is not legal advice and may not reflect the most current law in your state. Consult a licensed attorney for advice specific to your situation.
