Rental Insurance Inquiry
I’m reaching out for advice regarding a rental situation. I own a shop building in Tennessee that has several rooms. One of those rooms is being rented by a woman who uses it as an art studio. She teaches painting classes to pre-teens about 3-4 days a week. While she does operate a business from the studio, she has no plans to open a retail storefront there.
I’ve been having a difficult time with my current home insurer, Allstate, trying to secure liability coverage that would protect me in the event of an injury occurring in her studio. After two months of discussions, they still haven’t located a broker who can help.
Should I consider looking into commercial property insurance? I’m unsure about what steps I need to take versus what would be wise for this situation.
Any guidance or advice would be greatly appreciated! Thank you.
It sounds like you’re in a bit of a tricky situation with your rental space and the potential liability concerns involving your tenant. Here are some points to consider:
Commercial Property Insurance: Since the space is being used for a business, looking into commercial property insurance could be a smart move. This type of insurance typically covers the building as well as liability for any injuries that may occur on the premises. It could provide you with the protection you’re looking for, especially since your tenant is conducting classes with minors.
Liability Insurance: Even if you go with commercial property insurance, you may want to consider adding a general liability policy. This can protect you from claims related to injuries or accidents that happen in your shop building. Make sure to discuss the specifics of your situation with an insurance agent who specializes in commercial policies.
Tenant’s Insurance: Encourage your tenant to obtain her own liability insurance for her art studio. Many small business owners carry their own liability coverage, which can protect both her and you in case of an incident. This can sometimes be a requirement for commercial leases.
Review Your Lease Agreement: Ensure that your lease agreement with the tenant includes clauses that address liability and insurance requirements. This can help clarify responsibilities and protect your interests.
Consult with Multiple Brokers: If Allstate is having trouble finding a broker, it may be worth consulting with other insurance providers or brokers. They may have more experience with commercial property situations and can offer tailored advice.
State Regulations: Check for any state-specific regulations regarding businesses operating out of residential or mixed-use properties. You may need to ensure compliance with local zoning laws.
Professional Advice: It might also be beneficial to seek out legal advice related to your rental situation to ensure you’re covering all bases regarding liability and insurance.
Overall, it’s important to protect your assets and ensure that both you and your tenant have adequate coverage. Good luck, and I hope you find a solution soon!