What is Lessor?
A lessor is the owner of an asset or property who grants the right to use it to another party, called the lessee, in exchange for periodic payments. The lessor retains ownership of the asset during the lease term, while the lessee gains the right to use the asset. Leases are common in both residential and commercial real estate, as well as for vehicles and equipment.
In the context of business and personal insurance, lessors may require insurance policies to protect the assets they are leasing. For example, in a commercial property lease, the lessor may require the lessee to maintain property insurance to cover potential damages to the property. Similarly, in vehicle leasing, the lessor often mandates the lessee to carry insurance that covers the vehicle against damage or loss.
The lessor’s role is to protect their ownership interest in the leased property while ensuring the lessee meets their obligations during the lease term. Properly structured lease agreements typically include terms related to maintenance, insurance requirements, and responsibility for damages, which can influence the lessor’s liability and the insurance coverage needed.