Damage to Premises Rented to You
Made Simple.
Learn what this General Liability coverage protects, when it applies, common coverage limits, and what isn’t covered.
What is Damage to Premises Rented to You?
Damage to Premises Rented to You (formerly called Fire Damage Legal Liability) is a type of General Liability insurance that helps pay for damage to a building or part of a building that you rent, lease, or temporarily occupy when you are legally responsible for the damage.
Despite its former name, this coverage is not limited to fire under the standard ISO Commercial General Liability (CGL) policy.
Why might you need this coverage?
Many property owners require contractors to carry this coverage because they want assurance that if a contractor accidentally damages the rented space, there is insurance available to help pay for repairs.
Examples include:
• Office space
• Retail locations
• Warehouses
• Storage units
• Temporary jobsite trailers
• Event venues
• Short-term rented workspaces
What does it cover?
Damage to Premises Rented to You typically covers your legal liability for accidental damage to the rented building caused by covered occurrences, such as:
• Fire
• Smoke
• Explosion (when resulting from a covered cause)
• Certain other accidental causes of loss, depending on the policy wording
Coverage only applies when you are legally liable for the damage.
What is NOT covered?
This coverage generally does not cover:
• Normal wear and tear
• Poor maintenance
• Gradual deterioration
• Intentional damage
• Damage to your own business property
• Damage excluded by the General Liability policy
How long must I rent the property?
Under the standard Commercial General Liability policy:
• Fire damage may be covered regardless of how long you rent the premises.
• For many other covered causes of loss, the premises generally must be rented for 7 or fewer consecutive days.
Some insurance companies may modify these provisions, so always refer to your policy.
Common Limits
Common Damage to Premises Rented to You limits include:
• $50,000
• $100,000
• $300,000
• $500,000
The limit applies per premises, not per policy year.
Example Scenario (Covered)
A contractor rents office space.
An employee accidentally leaves a coffee maker on overnight, causing a fire that damages the landlord’s building.
Result:
• Building damage: $85,000
• Policy limit: $100,000
The insurer could pay up to $85,000, subject to the policy terms, conditions, and exclusions.
Example Scenario (Not Covered)
A contractor notices the roof has been leaking for months but never reports it or takes reasonable steps required under the lease.
Over time, the leak causes $60,000 in water damage.
Result:
This generally would not be covered because the damage resulted from ongoing deterioration or failure to maintain the premises rather than a sudden covered occurrence.
What if the damage exceeds my limit?
Your insurance company will generally pay up to your policy limit (subject to the policy terms and exclusions).
If you’re legally responsible for damages greater than your coverage limit, you may be responsible for paying the remaining amount out of pocket.
Example:
• Damage to building: $250,000
• Your Damage to Premises limit: $100,000
• Insurance may pay up to $100,000
• You could be responsible for the remaining $150,000
Frequently Asked Questions
No. Damage to Premises Rented to You is part of your General Liability coverage and is not the same as Property Insurance. It generally provides coverage for certain damage to premises you rent or temporarily occupy, subject to your policy’s terms and limits.
Yes. The General Aggregate is included as part of your General Liability coverage.