Leasing your facility can cost you money
Did you know getting a little extra income can cost you more than its worth?
- By leasing your facilities to outside third parties without being listed as an additional insured on their policy, you bear the cost of any injuries that occur during their event.
- This can also affect the amount of coverage available to you for your defense costs and settlement.
- Increased claim costs can have an overall effect on premium rates.
- What you think may be a positive experience may result in a catastrophic injury because your lessee may not have the qualifications and safety concerns you do. This can cost you your time, which is money, to attend court appearances and depositions, and may involve bad publicity. These may result in your facility being forced to close.
Ways you can prevent this from happening are:
- Don't do it at all!
- Check your contract to see if it is legal to sublease your space. You may be in violation of your contract and you may be asked to leave your facility.
- Confirm your lessee has insurance that lists you as an additional insured and has limits equal to or greater than yours. You should also require the lessee provide you with a hold harmless agreement which includes your business and landlord, if you do not own the building.
- An independent contractor must have their own insurance. They are not covered under your policy.
- Discuss your plan to lease your facility with your insurance agent or company before you proceed.
*Markel Specialty is a business division of Markel Service, Incorporated, the underwriting manager for the Markel affiliated insurance companies.