You own it. They run it.
Coverage for owners who lease a commercial building to tenants and don't operate a business there themselves: retail strips, offices, warehouses and single-tenant buildings.
Quick answer Lessor's risk only insurance is a policy for an owner who leases a commercial building to tenants and doesn't operate a business there, covering the building, the owner's liability and lost rents.
- Lessor's risk only (LRO) insurance pays to repair or rebuild the building after fire, wind, theft and other covered causes.
- A lessor's risk only policy covers the owner's liability for injuries in common areas, parking lots and sidewalks the owner controls.
- Under lessor's risk only coverage, the tenants' businesses, equipment and their own liability stay on the tenants' own policies.
- Lessor's risk only insurance is for commercial buildings leased to businesses, while landlord insurance usually means residential rentals.
- When a building owner also runs a business in the building, the coverage becomes commercial property instead of lessor's risk only.
By Sam Alishahi · CA Insurance License #4348151 · Reviewed October 2026 · How this page is researched
The landlord’s side of a commercial lease
A lessor's risk only policy insures the building, your liability as the owner, and the rent you lose if a covered loss forces tenants out. Your tenants' businesses, their equipment and their own liability stay on their policies.
Because the owner isn't running the operations, LRO is often written at a lower rate than a policy for an owner-occupied building. The tenant mix drives it: a restaurant, a gym or a cannabis tenant changes how carriers look at the whole building. I place it with admitted and specialty carriers based on the building, the leases and the tenants.
- The buildingRepair or rebuild after fire, wind, theft and other covered causes.
- Owner’s liabilityInjuries in common areas, parking lots and sidewalks you control.
- Lost rentsRent you lose while a covered loss is repaired.
- Tenant requirementsCertificates showing tenants insure their own operations.
What underwriters will ask
Having these ready means I can go to market on the first call. The quote form asks for the same things, and anything you don’t know yet can wait.
- Building: address, year built, square footage and construction.
- Updates: roof, electrical, plumbing and HVAC years.
- Tenants: each tenant's business and square footage.
- Leases: who insures what, and required limits.
- Rents: annual rental income.
- History: current policy and claims.
Lessor’s risk only insurance, answered
What does lessor's risk only mean?
It's a policy for a building owner who leases the building to others and doesn't operate a business there. It covers the building, the owner's liability and lost rents, not the tenants' operations.
Do my tenants need their own insurance?
Yes. Leases usually require tenants to carry general liability naming you as additional insured, plus coverage for their own property. I can check the certificates you collect.
Is LRO the same as landlord insurance?
Landlord insurance usually means residential rentals. LRO is for commercial buildings leased to businesses.
What do underwriters rate on?
The building's age, construction and updates, its location, the tenants' businesses and the building's claims history.
Do you offer lessor's risk only insurance outside California?
Yes. Clients across the country send the same quote form. California policies are placed directly; outside California the request is handled together with a partner agency in your state, and the shopping across carriers works the same way. Rules, minimums and markets differ by state — see insurance requirements by state.
Send the address and tenant list. I'll shop it.
The address, the tenants and your current policy are enough to start.
Alishahi Insurance · Saman Alishahi, independent insurance broker, California License #4348151. General information, not a quote or a promise of coverage; coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued. Some policies may be placed with nonadmitted (surplus lines) insurers, which are not members of the California Insurance Guarantee Association (CIGA).
Tell me how to reach you. I’ll take it from there.
Takes about 30 seconds. I review every request personally and call you back, usually the same day.
(424) 552-4545Answered 24/7 · CA License #4348151
Get a reminder before your renewal.
Tell me when your policy renews and I’ll email you about six weeks before, when it’s worth comparing. One email, no calls.