Lessors Risk Only

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ercial Business School – L

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Lessors Risk Only

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TWFG Commercial Business SchoolLessors Risk Only

Learning Objectives

To understand the basic Commercial and Habitational LRO risk exposures

To be familiar with the common coverages provided in carrier enhancements for this class of business

To be aware of the admitted market appetite for this class

To be able to successfully complete ACORD applications

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TWFG Commercial Business School Lessors Risk Only

Glossary

LRO (Lessors Risk Only)

Vacancy

Preferred Lease Contract

Lessor’s Leasehold Interest

Ordinance or Law

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Exposures in General

General Liability Property

Housekeeping Age & Condition

Additional Insured Status Roofs & ElectricalTypes of Tenants Types of Tenants

Vacancy

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Business Income

When choosing Business Income, the insured must select one or more of the three options. Those with “Rental Value” apply for LRO risks:

Business Income including “Rental Value”

Business Income other than “Rental Value”

“Rental Value”

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Carrier EnhancementsFairly generic. Most offer some additional limits on specific coverages such as:

Ordinance or LawDebris Removal and Utility Services-Direct

Damage

Coverages of Note:Tenant Move Back ExpensesLessor’s Leasehold Interest

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Carrier Appetite

Habitational:Very little appetite in the admitted markets

Some appetite for Apartments, but guidelines are tough and no Tier 1 or Tier 2 availability

Some rental dwelling capacity with USLI

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Carrier Appetite

Commercial LROs:Some appetite in the admitted markets. Bank

or Office LROs are acceptable to most our carriers

Some appetite for commercial condos (business occupancy) and manufacturing LROs

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Preferred SIC Codes

All preferred risks in this category fall under SIC code 6512

Support Document Located on the Branch & GA websites

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Submission ChecklistA submission checklist is the easiest way to ensure that all exposures have been accounted for and addressed

Support document is available on the Branch & GA website

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Case StudyThis segment includes a Case study. For those Branches participating in the Certified Commercial Branch Agency (CCBA) Program you will need to complete and pass in order to receive credit for this segment. For Branches not participating, the Case Study is optional

For GA agents the Case Study is optional.

The Case Study material will be available on the Branch and GA portals

RETURN COMPLETED CASE STUDIES TO MARK GLAUG @

[email protected]

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QUIZ

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1. Name three critical exposures (GL or Property) that need to be analyzed for this class of business.

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1. Name three critical exposures (GL or Property) that need to be analyzed for this class of business.

Age and Condition of BuildingTenantsRoofVacancyHousekeeping

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2. Name three of the four preferred elements of a landlord lease contract.

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2. Name three of the four preferred elements of a landlord lease contract.

Each tenant carries CGL form “A” rated carrier with $1M/$2MLandlord listed as AI on all tenants’ CGL policyLandlord granted WOS status on each tenants’ CGL policyEach tenant provides COI and AI endorsement to the landlord

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3. What is Ordinance or Law coverage?

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3. What is Ordinance or Law coverage?

It covers the increased cost of repairs or reconstruction due to changes in building codes that were not in place at the time of the original construction.

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4. Name 3 critical items from the LRO Submission Checklist

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4. Name 3 critical items from the LRO Submission Checklist

Dates and details of updatesComplete square footage informationComplete tenant listingVerification of preferred lease contract componentsVerifying that a current sprinkler cert has been issuedAnalysis of all additional property coverages needed

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5. How will the carrier view the tenants’ operations in regards to acceptability of the risk?

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5. How will the carrier view the tenants’ operations in regards to acceptability of the risk?

The carrier will likely only write the risk if all of the tenants are classes of business that the carrier would also write

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Questions???

Documents

Lessors Risk Only