Does Your Greene County Business Need Fire Legal Liability Insurance?

3/6/2022 (Permalink)

When fires occur in Springfield or Greene County rental units, whether commercial or residential, major disputes can arise between tenants and landlords. Fire legal liability refers to those responsible for paying for the damage those fires cause.

The cost of fire damage to a property can run into the thousands. According to the National Fire Protection Association (NFPA), in 2020 there were 1,338,500 fires. These resulted in 21.9 billion dollars worth of damage!

The International Risk Management Institute (IRMI) defines fire damage legal liability coverage as “coverage of a tenant’s liability for damage by fire to the rented premises (including garages) the tenant occupies”. For Springfield and Greene County business owners, this coverage is included under their commercial general liability policy. But, for that policy to pay for fire-related damages, there must be proof the insured party was at fault.

For instance, say that you’re renting a warehouse in Springfield. One night before leaving, an employee accidentally leaves a space heater running next to some boxes. Later that evening, that box catches fire and the entire building goes up in smoke. By the time the fire was over, the building had suffered over $100,000 worth of fire damage. The owner of the building insists you pay for all damages since the fire damage was the cause of your business’s negligence. In this scenario, your fire legal liability would pay for these losses.

Fire Legal Liability Limitations

There are times when a tenant is guilty of starting a fire, but their general liability insurance won’t cover the loss. This happens when the lease the business signs states that it accepts full responsibility for any fire damage that occurs while they’re under that lease, no matter how the fire started. (Some businesses may sign such a lease to get a lower lease rate, gambling that a disaster will never happen.) The business will have to pay for fire damage restoration because they signed such a contract. In this situation, liability insurance will only pay for fire restoration if the renter directly causes the fire.

Additionally, these other limitations may exist:

• A coverage limit of $50,000 to $100,000
• It only covers fire damage, not water damage or other related losses
• Only the structure is covered, not the contents

Fires are sometimes caused by natural disasters that are no one’s fault, so it’s vital to take additional precautions. Explore your options and ask your insurance agent for a legal liability coverage form that will give you extra coverage for all types of damage such as flooding and tornadoes that could occur to a commercial property while you’re a tenant. This is the best way to protect your financial future if a major disaster befalls the property you’re leasing.

If you’re looking for expert restoration services, contact SERVPRO of Springfield / Greene County today. Our commercial restoration service is reliable and available to you 24 hours a day, 7 days a week. We have years of disaster restoration experience that you can trust to repair and restore fire, water, and any other damage done to your property efficiently, no matter how large or small.