The landlord's policy: lessor's risk insurance in Florida,
from a former shopping center manager.

Lessor's risk insurance, called lessor's risk only or LRO, is the commercial property and general liability package a landlord carries on a building that tenants occupy and the landlord does not. It insures the structure the owner still owns after the lease is signed, the rent that stops when the structure is damaged, and the owner's liability for the parking lot, roof, sidewalks and common areas that no tenant controls. Hendrickson Insurance in Sarasota writes it for landlords across the Florida Gulf Coast and the I-4 corridor.

LRO is written on the assumption that the landlord is a landlord. The rate and the forms are built for an owner whose exposure is the structure and the common areas. Most carriers will still write LRO when the owner occupies a small share, and each carrier sets its own threshold for how much is too much. That threshold is not in any statute; it is an underwriting guideline, and it differs from one company to the next.

When the owner occupies a meaningful portion and operates there, the general practice is a commercial package policy or a business owner's policy, which insures the building the same way and adds what LRO was never designed to carry: the owner's business personal property, business income, products and completed operations liability, and employees. An owner who runs a dental practice in half a building and leases the other half is a dentist who happens to be a landlord. Disclose the occupancy and let the underwriter pick the form; the premium difference is usually modest and the coverage difference after a fire is not.

Every Florida leased building gets three questions from the underwriter: roof age, distance to open water, and flood zone.

Hurricane deductibles. Florida Statute 627.701 sets the framework for hurricane deductibles on residential policies and, in subsection 8, on commercial residential policies. It does not dictate the deductible on a commercial nonresidential building. A landlord's wind or named storm deductible comes from the policy form the carrier files, almost always a percentage of the building limit. Multiply it out and decide whether you can fund that number the week after the storm.

Roof age. Carriers rate the roof before anything else. A documented roof, with permits and a photo, keeps the admitted market open; an undocumented roof past the carrier's age guideline sends the building to surplus lines or a wind exclusion.

Flood. All of Florida is a flood zone. FEMA maps the state into Special Flood Hazard Areas, where a federally regulated or insured lender must require flood insurance on a federally backed loan, and moderate or minimal hazard zones, where it is optional and still floods. FloodSmart lists the NFIP commercial limit at 500,000 dollars for the building and 500,000 for contents, and the NFIP commercial policy does not pay business interruption or loss of use, so loss of rents after a flood is uninsured unless a private policy carries it. NFIP stays primary because it does not non-renew after a claim; private flood goes above it as excess.

Most landlords never read the insurance section of the loan documents until the servicer sends a deficiency letter.

• Replacement cost, no coinsurance penalty. Full replacement cost, with coinsurance waived or an agreed value endorsement. The Florida Department of Financial Services explains the arithmetic in its commercial property overview: an 80 percent coinsurance clause on a 1,000,000 dollar building requires at least 800,000 dollars of coverage, and a limit below that reduces every claim payment proportionally.
• Wind deductible caps. Many loan agreements cap the wind or named storm deductible the borrower may carry. A higher deductible taken to save premium can put the loan out of compliance.
• Flood in a Special Flood Hazard Area. Under the federal mandatory purchase requirement, a federally regulated or insured lender must require flood insurance on a building in an SFHA that secures a federally backed loan. Lenders generally want the NFIP maximum or the loan balance, whichever is less.
• Mortgagee clause. The lender named as mortgagee under a standard mortgage clause, with its exact legal name, loss payee address and advance notice of cancellation.
• Loss of rents. A stated minimum period, commonly twelve months, with the lender as loss payee.
• Force-placed coverage. If the policy lapses or falls short, the servicer buys coverage that protects the lender's interest only and adds the cost to the loan.

An owner with a strip center in Bradenton, two office buildings in Tampa, a flex building off US-19 and a warehouse in Orlando does not need five renewal dates. A portfolio program puts every location on one schedule with a statement of values, one renewal date, one liability policy, one umbrella, and one certificate template for tenants and lenders.

The main decision is blanket versus scheduled limits. A scheduled policy caps a loss at that building's limit. A blanket policy applies one combined limit across the schedule, so an under-valued building can still be rebuilt. Carriers that write blanket limits usually attach a margin clause, which caps recovery at a percentage above the value shown for that location, and expect the statement of values to be current. Portfolio owners are also the clients whose personal side matters most, which is why Hendrickson Insurance writes high-value home insurance in Florida on the same desk as the buildings.

A landlord's policy is half the program. The lease is the other half, because it decides what the tenant must carry, who is named on it, who insures the buildout, whether rent abates after a loss, and whether the tenant's carrier can subrogate against the landlord. I chased tenant certificates for years as a shopping center manager: the lease said one thing, the certificate said another, and nobody looked until there was a claim.

The insurance clause should require general liability at stated limits, property coverage on contents and tenant-owned improvements, business income and workers compensation, with the landlord, its manager and its lender named as additional insured by endorsement, plus primary and noncontributory wording, a waiver of subrogation and notice of cancellation. The language that works in Florida retail leases is in our guide to NNN lease insurance requirements for Florida retail. How to collect and check the certificates is in tracking tenant certificates for Florida plaza owners.

Before insurance, I managed shopping centers. I leased dark units, negotiated insurance clauses, collected certificates and met adjusters on the roof. A landlord gets an agent who reads the rent roll as an underwriting document. The Florida strip mall insurance guide goes deeper on multi-tenant retail, and the 45-day letter covers what to do the day a non-renewal arrives. If a building is a better fit for a different agent or an online policy, I say so on the first call.

• Address and year built, with the rent roll: tenant names, uses, square footage, and what you occupy yourself.
• Current declarations pages for property, liability, flood and umbrella.
• Five years of loss runs from the current and prior carriers.
• Roof age, roof type and any roof permits.
• Wind mitigation or inspection report if one exists, and the flood zone from the FEMA map.
• Statement of values for more than one building, and the lender's insurance requirements.

Dennis reads every application himself and responds within 48 hours, usually the same business day.

Apply for a lessor's risk quote

Dennis Hendrickson is the owner of Hendrickson Insurance in Sarasota, Florida, licensed general lines agent, FL License E095547, and the only person who touches your file. Before insurance he managed shopping centers. Sources used on this page: Florida Statute 627.701, hurricane deductibles; Florida Department of Financial Services, commercial property insurance overview; FloodSmart, NFIP commercial coverage; FEMA, flood risk for real estate, lending and insurance professionals; FEMA, mandatory purchase requirement; FEMA Flood Map Service Center. Last reviewed September 2026.