Many freelancers, SMEs and individuals have premises to rent or have leased one to develop their professional activity.
An incident can lead to considerable damage to the property, which a Rental Civil Liability coverage can cover, to avoid shocks. We tell you what it consists of.
The Rental Civil Liability (RC) protects the owner of a property against damages that it may suffer when it is rented to another person who is carrying out some task that, by action or omission, results in an incident.
It protects both if a continuous economic activity is carried out over time, or if it is rented for events that are carried out in a timely manner in the property.
And it can be hired by both the owner of the premises or house and the person who has rented it, so as not to respond for the damages with their assets and derive the corresponding compensation from the insurer.
In which insurances is the Leasing RC included?
The rental is one more coverage, which is not usually contracted individually, but will normally be present in a General Civil Liability policy.
We can also find it in Multi-risk insurance, to cover damages that occur in businesses, homes, neighboring communities, industries…
And in the event that the leased property is a home, it can be included in Home insurance.
Although in the first two cases it is usually incorporated from the start, there are times when it does not appear, so if needed it must be contracted as an additional or complementary guarantee.
Rental Civil Liability Coverage
The RC Leasing basically ensures two aspects: the financial protection of the insured and their legal defense.
In any case, its coverage will depend on the general and particular conditions contracted in the policy, although there are a series of events that are always present and in the face of which damage caused to the rented premises is covered: explosions, fires and water damage, such as floods, humidity, leaks or leaks.
Unless previously agreed with the insurance company, the Leasing Civil Liability clause does not include damage to the structure or facilities of the rented premises, nor to its content (furniture, machinery, tools, personal property, etc.).
When is it advisable to contract these Coverages?
In general, it is an ideal clause for the owners of a property intended for the use of third parties; for whoever rents a place or industrial warehouse in which an activity is going to be carried out for profit; and for the landlord of a home in which a commercial activity is carried out.
This coverage is especially important for the company that has leased the premises, since if it does not have it, it will have to face the costs of damage caused to it by an incident during its professional activity.
Especially if it involves certain risks, that is to say, products or utensils are used that could cause a fire, a flood or a gas explosion, which could lead to considerable damage that will have to be borne by the owner of the premises.
In addition, it must be taken into account that sometimes the owner of a property has contracted this type of coverage, so it is guaranteed that the insurer will compensate him in the event of an accident.
But if the tenant does not have this protection, the insurance company that has indemnified the owner can later claim the amount paid from the tenant, by making him responsible for the damage caused.
Differences between Leasing Civil Liability and Real Estate Liability
There is a lot of confusion between these two coverages, since both have the premises as their axis of protection. But there are differences.
The Real Estate RC covers personal or material damage caused by the property owned by a third person, exclusively protecting the owner of the same.
Thus, for example, if a premises catches fire due to a short circuit due to a poor electrical installation and the fire or smoke spreads.
And it causes material damage to adjoining properties, the owner of the establishment is responsible and must indemnify for the damages. caused to third parties.
Meanwhile, the RC Leasing covers the damages caused to the rented premises, also giving coverage to the tenant of the same.
If a worker in a rented industrial warehouse manipulates a machine that leads to a fire that causes material damage in the rented premises, the lessee must be responsible for those damages generated in the property where the activity is carried out.
Examples of Premises Civil Liability
When renting a property to carry out a professional activity, you must respond to any incident that occurs in it, whether voluntary or not.
A short circuit in a machine or a small water leak from a pipe are enough mishaps for you to have to assume the cost of damage.
There are many practical cases in which it can be seen how this coverage can be essential as a protection measure against different types of mishaps:
- A factory that suffers a fire and causes damage to the walls of the building.
- A place that is rented to celebrate a gastronomic event and a gas leak occurs that causes an explosion.
- Water leaks in shops or rental offices.
- A fire that occurs in the kitchen of a restaurant that is in a leased space.
- Renting a venue to a music group to perform a concert and at the end there are damages to the walls.