Commercial property owners can face legal liability if another person is injured or their property is damaged because of circumstances associated with the insured property.

Public Liability Insurance can provide protection against certain claims of this type.

What types of claims can arise? #

Examples can include allegations involving:

• Slips and falls in common areas.
• Falling building materials.
• Defective stairs or handrails.
• Damage caused to neighbouring property.
• Water escaping from the premises.
• Poorly maintained common areas.
• Other hazards associated with ownership of the property.

The actual insurance response depends on the policy and circumstances.

Doesn’t the tenant have Public Liability Insurance? #

A tenant may have Public Liability Insurance for liabilities arising from its own business activities.

That does not necessarily protect the property owner’s own legal liability.

Both parties can have separate exposures.

What about common areas? #

Areas controlled by the landlord can create particular exposure.

Examples include:

• Car parks.
• Entrances.
• Lifts.
• Stairways.
• Shared corridors.
• External areas.

The lease should help identify which party is responsible for maintaining different parts of the property.

What liability limit should be insured? #

There is no single limit suitable for every property.

Consider:

• Property type.
• Number of tenants.
• Public access.
• Contract or lease requirements.
• Potential severity of a claim.

The required limit can also be specified by lenders, leases or other agreements.