Question:
We are a rental company that do short- and long-term rentals.

We recently encountered a long-term tenant defaulting and would like to know what insurance companies we could recommend to our landlords to protect them?

Answer:
Preliminary research shows that insurance companies do not offer cover for this type of loss.

Outsurance does offer specialised services like 'business interruption cover', but this is for financial loss you suffer following the interruption of your normal business activity.

Losses from tenants defaulting on leases are a fairly common thing and therefore I would assume a far too risky event for insurances companies to take on. Even if they did, the premiums would be astronomical.

There are too many variables when it comes to lease termination and it could be manipulated. Let’s say the tenant needed to move out — it would be easy for the landlord to release the tenant and claim from the policy.

So unfortunately rental companies will have to take it on the nose when it comes to errant tenants.

The best advice I can give you is to ensure that the people you let to have been properly vetted.