What does landlord insurance cover?
Landlord insurance typically provides coverage for three things: the physical building you own, your liability as a property owner, and the rental income you could lose if a covered event made your property uninhabitable. What landlord insurance doesn鈥檛 usually cover for rental properties is the tenant鈥檚 property, routine building maintenance, or a tenant鈥檚 business operations inside your building. These are usually protected by a tenant鈥檚 own personal insurance or business insurance policies.
explains what covers and which coverage options make sense for both residential and commercial rental properties.
Landlord insurance can help protect property owners (in insurance, they can often be called 鈥渓essors鈥) who rent or lease their property residentially or commercially. It鈥檚 intended to cover risks for landlords who rent out the space, rather than provide protection for the occupants of the rented space.
Landlord insurance typically includes three types of coverage:
- Property coverage 鈥 The building itself and structures related to the building.
- Liability coverage 鈥 The cost of medical bills for visitors who suffer an injury in the space and related legal claims.
- Business income protection 鈥 Lost rent after a covered event, such as a fire or a burst water pipe, that leaves the space uninhabitable temporarily.
What could landlord insurance cover?
Let鈥檚 dig in further to understand what could be covered, including some example scenarios and risks for landlords who rent out their property to residents and businesses.
1. Property damage
is usually the foundation of landlord insurance for rental properties. This type of coverage could help repair the building structure if it鈥檚 damaged by a covered event such as fire or smoke, vandalism, or a natural event like a storm, wind, or hail.
Coverage typically includes the building walls, roof, and any common areas or shared spaces, depending on the policy. It also may cover built-in systems like HVAC or plumbing.
Example of landlord insurance property damage coverage: A grease fire breaks out in a tenant鈥檚 restaurant. The fire triggers the sprinkler system, causing fire, smoke, and water damage across multiple units.
The tenant鈥檚 own restaurant insurance may cover their equipment, but landlord insurance could help cover repair costs for the walls, ceilings, and integrated systems such as air conditioning or ventilation. Without landlord insurance coverage on the property, you, the lessor, could be stuck paying out of pocket to rebuild.
2. Liability protection
could help protect landlords if someone is injured on your property and you鈥檙e held responsible (in insurance, this is called bodily injury). This can be a high-risk exposure for landlords, especially in multitenant or commercial properties.
Liability insurance could help cover:
- Medical expenses
- Legal defense costs
- Settlements or court judgments
Example of landlord insurance bodily injury coverage: A visitor enters your building and slips on a wet floor in a common area. They get hurt and require medical care. Though they鈥檙e not your tenant, you could still be held liable as the property owner. Landlord insurance could help cover some of those costs.
As the property owner, you can be held liable for injuries to visitors and nontenants 鈥 not just your renters 鈥 making liability coverage a good idea for any lessor.
3. Loss of rental income
, also called business interruption insurance, is where landlord insurance goes beyond basic property care.
If your property becomes uninhabitable due to a covered loss, such as a fire, burst water pipe, or damage from extreme weather, landlord insurance could help cover the rental income you would have earned while your building is uninhabitable, as well as some other operational expenses.
Example of landlord insurance extreme weather damage coverage: A severe storm causes significant roof damage to your property. Tenants are forced to temporarily vacate while the building is being repaired, so you鈥檙e out on rent.
Landlord insurance could help replace lost rental income while the property is under construction. For many landlords, this can mean the difference between staying financially stable and taking a major financial hit.
What鈥檚 not typically covered by landlord insurance?
Here鈥檚 where many policies draw the line on coverage, though you should always check your policies for a full list of exclusions:
- Tenant property. Landlord insurance doesn鈥檛 usually cover tenant belongings like furniture, electronics, personal assets, or business inventory or any business property owned by tenants who rent a commercial space. Your tenants will need their own renters insurance or business insurance to cover those items.
- Regular wear and tear. Insurance is intended to cover sudden, accidental events, not ongoing issues. As a landlord, you鈥檙e responsible for routine upkeep, replacing aging systems, and fixing equipment breakdowns caused by time and use. If something like your HVAC system just conks out one day because you haven鈥檛 been keeping up with regular maintenance, that cost won鈥檛 be covered by landlord insurance.
- Your tenant鈥檚 business or operations. Your tenant鈥檚 business on your property is their own responsibility. If you lease a commercial space to a business, your policy will not cover that business operation, the tenant鈥檚 equipment, the tenant鈥檚 inventory, or the tenant's general liability.
Commercial landlord insurance vs. residential landlord insurance
Landlord insurance can cover both commercial and residential properties. Both types of coverage share the same general goal: Protect the building itself, the income it generates, and the landlord鈥檚 exposure if something goes wrong. But the risks, terminology, and policy structure can differ between them.
Commercial landlord insurance
Landlord insurance for commercial properties is often referred to as lessor鈥檚 risk only (LRO) insurance. This type of insurance can cover buildings like office spaces and retail storefronts where the tenants are businesses rather than individuals. With LRO, the building, including its common areas and shared systems, can be covered in some policies, but the tenant is responsible for their own operations, equipment, and business liability. Commercial properties tend to carry more variable risk due to factors such as multiple tenants with different business activities and higher foot traffic.
Residential landlord insurance
Landlord insurance for residential properties is for buildings that are rented or leased to individuals or families, such as single-family homes or small, multiunit buildings.
What type of insurance do landlords need most?
The right landlord insurance coverage depends on your property type, your tenants, and how much risk you鈥檙e willing to take on. The types of insurance that many landlords consider include:
Business owner鈥檚 policy (BOP insurance)
Some landlord insurance policies 鈥 especially for commercial properties 鈥 are written as a , which bundles for the building itself and business income loss with for injuries and legal claims. Bundling helps protect against coverage gaps, and it can be more cost-effective than buying two separate policies.
Despite being a great option for landlords, BOP adoption was the only major coverage type that did not see growth from 2023 to 2025, according to a of 500 small business owners. This lack of adoption suggests that small business owners 鈥 including property owners 鈥 may not realize the value of a single bundled policy.
Cyber liability insurance
This type of coverage could help protect landlords who collect and store sensitive tenant information like tenant applications, leases, and payment details. could help with coverage for the costs of data breaches, cyber attacks, and system failures.
Landlord insurance vs. homeowners insurance
One of the most common mistakes property owners make is to think that homeowners insurance provides sufficient coverage on a rental property. If you rent out a property, your risks change. Homeowners insurance is designed for owner-occupied homes. Landlord insurance is equipped to handle the complexity of residential and commercial rental properties.
If you make the mistake of relying on homeowners insurance, you may not be protected against the costs of tenant-related damage, liability involving tenants or visitors, or lost rental income.
How much landlord insurance coverage do you need?
The amount of coverage that a landlord needs depends on a number of factors, including:
- Your property size
- Residential or commercial property
- The type of property you rent
- The number of tenants you have
- The location of your property
- Local weather risks and other hazards
- Vacancy levels in your area
Many landlords look for coverage that can help cover a full rebuild for the cost of the property, liability limits high enough to protect their personal assets, and rental income that reflects the actual rent.
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