Understanding Fire Damage Legal Liability Coverage​

firefighters putting out a fire

Property damage after a fire can cost thousands. In 2014, U.S. fire departments responded to approximately 1,298,000 fires, resulting in an estimated $11.6 billion in direct property loss, according to a National Fire Protection Association (NFPA)*report. If you’re concerned with fire damage legal liability issues, ServiceMaster Restore® is here to provide important information regarding leases and other documents that can help.

What is Fire Damage Legal Liability?

The International Risk Management Institute (IRMI) states that fire damage legal liability coverage is the "coverage of a tenant's liability for damage by fire to the rented premises (including garages) the tenant occupies." This specific type of insurance coverage, often found under a standard CGL or commercial general liability policy, is typically subject to the insured's "damage to premises rented to you" limit.

Who Needs Fire Damage Legal Liability?

Individuals or businesses renting residential or commercial space may be required to provide fire damage legal liability coverage for the specific rental space or possibly for the building's total value. The policy should cover the insured for liability due to any negligence that results in fire spreading and damaging another individual's or company's property.

Potential Limitations A fire damage legal liability policy can have its limitations. These may include but are not limited to:

  • A monetary limit of either $50,000 or $100,000
  • Fire damage coverage only; no coverage for water damage or other related losses
  • Coverage for premises only; no coverage for contents
  • Coverage only if legal liability for the damage is the insured’s responsibility

Additional limitations may exist if the insured is a business rather than an individual. For example, an automotive business that suffers an explosion may not be covered if a spark ignites the fumes of a spray-painted vehicle. Moreover, if a business's lease directly states that the business or business owner is responsible for any damage to the property and premises, regardless of cause, the fire damage legal liability policy would not offer coverage.

Every business and individual has specific needs regarding policy coverage and the need for fire damage legal liability. An experienced insurance agent can determine the best coverage options for your particular needs and situation. It's essential to explore your options and alternatives before a loss occurs to protect yourself in the event of a fire.

 *Reproduced from NFPA’s website, © NFPA 2016.

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