Why making proof of renters insurance a condition of a lease agreement could benefit both you and your tenants.

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You’ve gone to great lengths to protect your valuable property, including investing in a Businessowners Insurance Policy (BOP). A BOP consists of critical insurance coverages, such as business property and general liability, and provides protection against a direct physical loss to your building and its contents and against the financial repercussions of a liability claim. As you already know, this coverage generally does not extend to your tenants or their personal possessions. However, many renters are under the impression that they can rely on your insurance policy to protect them and their things.

We recommend that you take the time to explain to current and prospective tenants how having a renters insurance policy may benefit them and that you make proof of insurance a condition of the lease agreement. This can help you make sure you have the broadest property and liability protection for your building and the people and contents in it.


While no building owner is obligated to mandate that their tenants get renters insurance, we want to make sure you know that requiring this coverage may benefit you as much as it does your residents.

Specifically, if one of your tenants is held responsible for an injury in their home or for damages to other people’s property in your building, it probably won’t just spell trouble for your renter. Generally, it also puts you and your assets at risk because you could possibly become the target of a time-consuming, stressful, and expensive liability claim.

However, if your tenants have secured renters insurance, it is typically their policies that will be the primary coverage for scenarios such as:

  • A guest slipping and falling in their home.
  • A tenant’s pet biting a delivery person on your property.
  • A renter letting their tub overflow, leading to water damage to their unit and others in the building.
  • A tenant needing to pay for alternative housing for a period of time after a storm causes major damage to your building.

Because renters insurance is the coverage triggered in situations like these, building owners may be able to avoid disputes with their tenants over who is responsible for related medical bills, the cost of replacing damaged or stolen belongings, additional living expenses that are incurred, hiring a lawyer and paying other legal fees, and more.

There’s one more benefit you might get by requiring tenants to have proof of renters insurance before they move in: You may be able to find out sooner rather than later who is likely to be a responsible renter and take good care of your valuable property.


In most states, tenants are not legally required to get renters insurance. So, many of your residents may never purchase this critical coverage, viewing it as an unnecessary additional monthly expense. The Andover Companies wants to arm you with some information that may help you explain to a potential lessor how this coverage may benefit them.

The following types of financial protection are typically included in renters insurance (up to the policy limit) and usually fill in for what a landlord’s insurance policy does not cover:

  1. Personal Property, which may help a tenant pay to replace or repair their belongings if damaged by a covered loss, like fire, theft, or extreme weather.
  2. Loss of Use, which may help a tenant cover the cost of temporary housing and other expenses (beyond the norm) they incur if their home is unlivable while being restored after a covered loss.
  3. Personal Liability, which may help a tenant pay legal fees and other expenses that may arise if they are found responsible for causing personal injury to someone else or damaging another’s property.
  4. Medical Payments to Others, which may help a tenant cover the cost of medical expenses if a guest in their home suffers an injury.

Another great insight to share with tenants is that renters insurance is typically extremely affordable—often just a few dollars per week—so this coverage offers a very smart, easy, and inexpensive way for renters to gain protection and provides added peace of mind to you, as the property owner.

You can also make obtaining renters insurance really simple for your tenants. Just point them toward a local independent insurance agent in The Andover Companies network who will help them understand what a standard renters policy covers and assist them in considering several optional endorsements that can be added on to broaden their protection or even save them money.

Since 1828, The Andover Companies has been committed to helping protect building owners and their properties by providing outstanding insurance solutions along with important insights such as our property inspection checklist for landlords and tips on lithium-ion battery safety for property owners and their tenants. If you would like to hear more about our business property coverage options, please contact an independent insurance agent near you.