Protecting Your Multifamily Assets: Understanding Tenant Legal Liability (TLL) and the benefits of implementing a TLL Program

There is significant risk for multifamily owners and property managers from potential property damage caused by residents. Examples of resident negligence-based damages may include those from fire, smoke, water, overflows, or explosion, which would not be covered under a property’s commercial policy deductible amount. In these cases, owners and operators would be out-of-pocket to cover the significant financial losses.

To mitigate these resident-caused losses, property owners may include a renters insurance requirement in their leases. However, merely having a renters insurance requirement is not enough for multiple reasons:

• Residents’ insurance policies may lapse for non-payment
• Residents may cancel their policies intentionally and shortly after presenting coverage to the landlord at lease signing
• Policy amounts might not be sufficient in coverage amount

In addition to the abovementioned issues that leave coverage gaps, there is substantial administrative burden for property staff to collect, track, and enforce the renters insurance requirement. The more units under management, the greater the workload.

The good news is that implementing the right Tenant Legal Liability (TLL) program ensures all renters always have appropriate coverage and eliminates the work associated with renters insurance compliance. TLL programs can even create a significant ancillary income stream for properties, ultimately increasing the value of your properties.

TLL programs meet the required property damage liability coverage amount, generally $100,000. Simply put, TLL programs, on a per-incident basis, can cover the liability that residents have to their properties for certain damages their negligence may cause. TLL programs can cover personal content loss, generally up to $10,000, as well as $1,000 in displacement costs.

TLL Covered Perils in Cases of Resident Negligence:

• Fire
• Smoke
• Explosion
• Water Damage
• Other Liquid Overflows/Leaks

When implementing a TLL program, you protect your properties against unforeseen losses from negligent residents. And by eliminating the work associated with renters insurance compliance and tracking, you can focus on managing your properties and growing your business. AssuredPartners Real Estate can help you choose a tenant liability program that meets your needs, ensuring you have the right coverage and provider.