Glossary

Damage to rented premises

A separate CGL limit that pays when you damage a building you rent, in the standard form by fire, despite the exclusion for property you rent or occupy.

Also called: damage to premises rented to you, fire legal liability, premises damage limit

The standard CGL excludes property damage to premises you own, rent or occupy. The ISO form (CG 00 01) then carves out an exception: the exclusions do not apply to damage by fire to premises while rented to you or temporarily occupied by you with the owner's permission. A separate limit, shown in the declarations as the Damage to Premises Rented to You limit, applies to that coverage. In the trade, this is fire legal liability.

It exists because of subrogation. If a fire you cause destroys part of the landlord's building, the landlord's property insurer pays its owner and then comes after you for the money. This limit is what answers that claim.

Three pitfalls. The standard grant is fire only, so water damage from a burst pipe or a failed sprinkler is not included unless the policy has been broadened by endorsement. The limit is often far smaller than the building's value, and a lease may demand more. And it never pays for your own contents or improvements; those are first-party property.

Read the lease's insurance clause and any waiver of subrogation alongside the policy. insurance requirements in commercial leases covers what landlords ask for, Inside the CGL policy: Coverages A, B and C explains where this limit sits, and waiver of subrogation explains the lease clause.

Last reviewed October 10, 2026

In the index now

Related terms

Commercial general liability (CGL) The standard business policy for claims that your operations, premises or products injured someone or damaged property, usually on ISO form CG 00 01. Property damage In liability policies, physical injury to tangible property including its loss of use, or loss of use of tangible property that was not physically injured. Waiver of subrogation An endorsement in which an insurer gives up its right to recover a paid claim from a named party, usually one the policyholder contracted with. Tenants' improvements and betterments Fixtures, alterations and additions a tenant pays for but cannot legally remove, insured by the tenant as its use interest under its own property policy.

Related guides

Care, custody and control: why the CGL won't pay for property you hold The CGL excludes damage to property in your care, custody or control. Who gets caught, where courts disagree, and which policies fill the gap. Inside the CGL policy: Coverages A, B and C How the ISO commercial general liability form's three coverages work: the triggers, the key exclusions, supplementary payments and which limit each claim uses. Insurance requirements in commercial leases What a commercial lease typically makes a tenant buy, from liability limits and additional insured status to waivers, and how to negotiate them before signing.

Related industries

Catering insurance Insurance for caterers: GL with food liability, host liquor and venue requirements, delivery auto, equipment cover and event exposures.