Property insurance: your building
Property insurance covers physical damage to the building itself, and usually building equipment and contents the owner owns, from covered causes such as fire, wind, burst pipes and vandalism. Good building programs add:
- Loss of rents / business income, for rent you can't collect while the building is repaired.
- Ordinance or law, for the extra cost of rebuilding to current code.
- Equipment breakdown, for sudden failure of boilers, elevators and electrical systems.
General liability: claims against you
Commercial general liability (CGL) covers your legal liability for bodily injury and property damage to others, such as a visitor slipping on an icy sidewalk or water from your building damaging a neighbor's property, plus defense costs. The Insurance Information Institute describes CGL as protecting a business from financial loss if it is liable for property damage or bodily injury, and for personal and advertising injury (Triple-I).
Side by side
| Situation | Property | General liability |
|---|---|---|
| Kitchen fire damages three apartments and the hallway | Yes, building repairs and lost rents | Only if others claim against you |
| A visitor falls on the front steps and is injured | No | Yes, defense and covered damages |
| A burst pipe floods the basement boiler room | Yes, subject to the policy terms | No |
| Water from your roof damages the building next door | Your own roof repair | The neighbor's damage claim |
| A tenant's belongings are ruined in a fire | No, that is the tenant's renters policy | Only if the tenant claims you were negligent |
What neither usually covers
Flood is generally excluded from standard property policies and is bought separately (FloodSmart). Wear and tear, gradual leaks and maintenance issues are generally not covered. Decisions by a co-op or condo board belong to D&O. And claims above your liability limit need an umbrella.
Frequently asked questions
Do I need both property and general liability for my rental building?
Yes, in practice. Property protects the building and your rent income. Liability protects you from injury and damage claims. Lenders require both.
Does general liability cover damage to my own building?
No. Damage to your own building is a property insurance claim.
Do tenants need their own insurance?
Your policy doesn't cover tenants' belongings or their personal liability. Renters insurance does, and many landlords require it in the lease.
Sources
- Insurance Information Institute: Commercial general liability insurance
- FEMA: FloodSmart, the National Flood Insurance Program
General information, not legal advice. Rules and guides change; your policy, bylaws and loan documents control. Checked October 16, 2026.