Whether working with the tenant or the landlord, always check the damage – destruction portion of the lease.
A major exposure that is almost always addressed in the lease is who will be responsible for maintenance and repair of electrical systems, heating, ventilating and cooling systems or other building machinery or equipment.
Tip for working with tenants: Many tenants have this exposure and are not aware of it. The proper solution is to provide Equipment Breakdown coverage but NOT as an endorsement to the Property policy, but rather as a separate coverage part or a stand-alone policy. By structuring the coverage in this manner, the definition of covered property is quite different from the Property policy language and will include coverage for damage to the covered equipment as well as resultant damage to the building.
Tip for working with landlords: Many landlords are not obtaining evidence of Equipment Breakdown insurance that should be provided by the tenant for these building items.
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