Lessors Risk Only Insurance for California Landlords.

Replacement cost pays to rebuild the property as-new, regardless of depreciation. Actual cash value pays only the depreciated value — what the property is worth today after wear and aging. For commercial buildings, the difference can be hundreds of thousands of dollars. We always quote replacement cost unless the building is so old that replacement isn't feasible.

Pays your rental income while the property is being rebuilt after a covered loss — fire, water damage, vandalism, etc. The carrier looks at your actual rent rolls and pays that income for the rebuild period (often 12 months, can extend). Without loss of rents, a major loss means no income for 12+ months while you're still carrying the mortgage.

When you rebuild after a covered loss, California building codes have likely changed since the property was originally built. Code-required upgrades (ADA, seismic, electrical, structural) can add 30-50% to the rebuild cost. Standard property pays only to rebuild as-was. Ordinance & law covers the additional cost of bringing the rebuild up to current code.

Standard commercial property completely excludes earthquake. California earthquake exposure is real, especially for multi-tenant commercial buildings where seismic upgrades may not be current. Earthquake is a separate policy (CEA or private market), typically with significant deductibles. We quote it explicitly so you make an informed decision rather than discovering the gap after the fact.

You're responsible for common areas — lobbies, parking, sidewalks, shared restrooms, elevators. A visitor injured in any of these is your liability. Tenants are responsible for inside their leased premises. LRO general liability covers your common-area exposure. We help structure leases so the responsibilities are clear and your tenants carry appropriate liability for their space.

In a triple-net lease, the tenant pays property taxes, insurance, and maintenance for their space. You still need LRO coverage for building structure, common areas, and your liability — but the tenant typically reimburses you for the LRO premium through their rent. We help structure the insurance section of NNN leases so the cost pass-through is clear.

Commercial buildings have major mechanical equipment — HVAC, elevators, boilers, hot water systems — that can cost $50K-$200K+ to replace when they fail. Standard property doesn't cover 'it broke' — it covers fire, water, theft, etc. Equipment breakdown fills the gap. For multi-tenant buildings where a failed HVAC means uninhabitable spaces and lease problems, this coverage is essential.

Loss of rents only pays when a covered property event causes the income loss — fire, water damage, etc. A tenant simply leaving or going bankrupt isn't a covered cause of loss. For that exposure, you need careful lease underwriting (security deposits, personal guarantees, financial review of tenants) — insurance doesn't cover business-failure rent loss.