If you own a commercial building and lease space to tenants — but don't occupy the space yourself — you need Lessor's Risk Only (LRO) insurance. It's one of the most misunderstood coverages in commercial real estate, and not having it can be financially devastating.
Who Needs LRO Insurance?
You need LRO insurance if you:
- Own a commercial building leased to one or more tenants
- Do not occupy more than 25–30% of the building yourself
- Rent to retail stores, restaurants, offices, or other commercial businesses
- Own strip malls, shopping centers, or standalone commercial properties
Why Your Tenant's Insurance Isn't Enough
Here's the critical mistake many landlords make: they assume their tenant's business insurance covers any claims on the property. It doesn't.
If a customer slips and falls in your tenant's store, that customer can sue both the tenant AND you as the building owner — even if you had nothing to do with the incident. Your tenant's liability insurance will protect them, but without LRO coverage, you have no protection.
What LRO Insurance Covers
General Liability
Covers you as the building owner if someone is injured on your property and sues you directly.
Building / Property
Physical damage to your structure from fire, storm, vandalism and other covered perils.
Loss of Rents
If the building becomes uninhabitable after a covered loss, this replaces your rental income.
Tenant Discrimination
Protects against wrongful eviction, fair housing violations, and tenant discrimination claims.
Get an LRO Quote from Activo Insurance
As an independent agent specializing in commercial real estate insurance, Activo Insurance can quickly shop your LRO risk to multiple specialty carriers. We serve property investors across Texas, Georgia, Florida, and Louisiana.
Call or text (682) 666-0461 or get a quote online. We respond within 24 business hours.