1. Lessors Risk Only

2. TWFG Commercial Business School Lessors Risk Only
Learning Objectives
To understand the basic Commercial and Habitational LRO risk exposures
To be familiar with the common coverages provided in carrier enhancements for this class of business
To be aware of the admitted market appetite for this class
To be able to successfully complete ACORD applications

3. TWFG Commercial Business School Lessors Risk Only
Glossary
LRO (Lessors Risk Only)
Vacancy
Preferred Lease Contract
Lessor’s Leasehold Interest
Ordinance or Law

4. TWFG Commercial Business School Lessors Risk Only
Exposures in General
General Liability Property
Housekeeping Age & Condition
Additional Insured Status Roofs & Electrical
Types of Tenants Types of Tenants
Vacancy

5. TWFG Commercial Business School Lessors Risk Only
Business Income
When choosing Business Income, the insured must select one or more of the three options. Those with “Rental Value” apply for LRO risks:
Business Income including “Rental Value”
Business Income other than “Rental Value”
“Rental Value”

6. TWFG Commercial Business School Lessors Risk Only
Carrier Enhancements
Fairly generic. Most offer some additional limits on specific coverages such as:
Ordinance or Law
Debris Removal and Utility Services-Direct Damage
Coverages of Note:
Tenant Move Back Expenses
Lessor’s Leasehold Interest

7. TWFG Commercial Business School Lessors Risk Only
Carrier Appetite
Habitational:
Very little appetite in the admitted markets
Some appetite for Apartments, but guidelines are tough and no Tier 1 or Tier 2 availability
Some rental dwelling capacity with USLI

8. TWFG Commercial Business School Lessors Risk Only
Carrier Appetite
Commercial LROs:
Some appetite in the admitted markets. Bank or Office LROs are acceptable to most our carriers
Some appetite for commercial condos (business occupancy) and manufacturing LROs

9. TWFG Commercial Business School Lessors Risk Only
Preferred SIC Codes
All preferred risks in this category fall under SIC code 6512
Support Document Located on the Branch & GA websites

10. TWFG Commercial Business School Lessors Risk Only
Submission Checklist
A submission checklist is the easiest way to ensure that all exposures have been accounted for and addressed
Support document is available on the Branch & GA website

11. TWFG Commercial Business School Lessors Risk Only
Case Study
This segment includes a Case study. For those Branches participating in the Certified Commercial Branch Agency (CCBA) Program you will need to complete and pass in order to receive credit for this segment. For Branches not participating, the Case Study is optional
For GA agents the Case Study is optional.
The Case Study material will be available on the Branch and GA portals
RETURN COMPLETED CASE STUDIES TO MARK

12. TWFG Commercial Business School Lessors Risk Only
QUIZ

13. TWFG Commercial Business School Lessors Risk Only
1. Name three critical exposures (GL or Property) that need to be analyzed for this class of business.

14. TWFG Commercial Business School Lessors Risk Only
Name three critical exposures (GL or Property) that need to be analyzed for this class of business.
Age and Condition of Building
Tenants
Roof
Vacancy
Housekeeping

15. TWFG Commercial Business School Lessors Risk Only
2. Name three of the four preferred elements of a landlord lease contract.

16. TWFG Commercial Business School Lessors Risk Only
Name three of the four preferred elements of a landlord lease contract.
Each tenant carries CGL form “A” rated carrier with $1M/$2M
Landlord listed as AI on all tenants’ CGL policy
Landlord granted WOS status on each tenants’ CGL policy
Each tenant provides COI and AI endorsement to the landlord

17. TWFG Commercial Business School Lessors Risk Only
3. What is Ordinance or Law coverage?

18. TWFG Commercial Business School Lessors Risk Only
3. What is Ordinance or Law coverage?
It covers the increased cost of repairs or reconstruction due to changes in building codes that were not in place at the time of the original construction.

19. TWFG Commercial Business School Lessors Risk Only
Name 3 critical items from the LRO Submission Checklist

20. TWFG Commercial Business School Lessors Risk Only
Name 3 critical items from the LRO Submission Checklist
Dates and details of updates
Complete square footage information
Complete tenant listing
Verification of preferred lease contract components
Verifying that a current sprinkler cert has been issued
Analysis of all additional property coverages needed

21. TWFG Commercial Business School Lessors Risk Only
How will the carrier view the tenants’ operations in regards to acceptability of the risk?

22. TWFG Commercial Business School Lessors Risk Only
How will the carrier view the tenants’ operations in regards to acceptability of the risk?
The carrier will likely only write the risk if all of the tenants are classes of business that the carrier would also write

23. TWFG Commercial Business School Lessors Risk Only
Questions???