Subject: Question About Commercial General Liability Coverage for New Warehouse Lease
I’m in the process of leasing a larger warehouse, and one of the requirements is a coverage limit of $1,000,000 for damage to rented premises per occurrence. I contacted my insurance broker to obtain the Certificate of Insurance for the new property, but I was informed that my current carrier only provides coverage of $100,000, with a maximum of $250,000 if fire sprinklers are installed.
Is a $1,000,000 per occurrence limit considered high? It seems relatively modest given the size and value of the building. My broker mentioned that this is the extent of what they can offer and did not provide any alternative solutions or carrier options. This situation is in Northern California, in case that’s relevant. Any insights or advice would be greatly appreciated!
It’s understandable to be concerned about the insurance requirements when leasing a larger warehouse space. A $1,000,000 damage to rented premises (per occurrence) limit is fairly standard, but whether it’s sufficient really depends on several factors, including the size and value of the building, the type of operations you’ll be conducting, and the potential risks involved.
In Northern California, particularly with the high property values, $1 million might seem low, especially if you’re leasing a facility that houses valuable equipment or inventory. It’s also worth considering local regulations and any additional risks specific to your business or location.
If your current broker is unable to provide the needed coverage, it might be beneficial to seek quotes from other insurance carriers or brokers who may specialize in commercial real estate or have more flexibility. Additionally, you could discuss the possibility of increasing your coverage limits or exploring other types of insurance that could help meet lease requirements.
In conclusion, it would be wise to assess your specific needs and possibly consult with another broker or insurance expert to ensure you have adequate protection for your new warehouse space.