Tulips behind a sofa

Are You Covered When Renting Out?

From concert space to meeting rooms, rental locations increase liability.

Many types of public entities offer spaces for the public to rent, but the inherent liabilities that come with a rental arrangement often go overlooked. It doesn’t matter if the space is big or small—if a constituent or member of the public rents space without adequate coverage, the liability could be passed along to the owner of the rental space: the public entity.

To mitigate this kind of risk, public entities often require that temporary tenants have TULIP coverage as part of the rental agreement. Simply put, this protects the owner and tenant against claims and lawsuits filed by guests and attendees. Below, we’ll discuss the extent of TULIP and what public entities can do to ensure they are covered.

TULIP? Like the Flower?

Unfortunately, we’re not talking about the flower—although discussing the need for TULIP with staff, management, and potential tenants is a good way to plant some seeds.

TULIP is an acronym that stands for Tenant Users Liability Insurance Program. This is a type of coverage specially designed for tenants and users of venues who require short- term coverage for events not typically covered under their pre-existing coverages. It is also known within the industry as “events coverage.”

TULIP protects temporary tenants as well as the organization that owns the facilities. It offers protection against claims by third-parties who suffer injuries, loss of property, or other losses stemming from the tenant’s use of time at the rented facility.

Often times, TULIP coverage serves as additional coverage in conjunction with pre-existing policies that the temporary tenant or organization already have. Third-party claims that stem arise from a situation where a tenant is renting space from an organization often falls outside the scope of both parties’ policies. In some cases, depending on the policy terms, coverage is extended for a single event or a number of events. In all cases, TULIP fills in any gaps in coverage.

My Organization Rents Out Public Spaces—What is Covered? What Needs to Be Covered?

Venues that may require TULIP coverage include low-risk locations such as conference rooms, classrooms, and various event spaces. They can also include high-risk locations such as parades, festivals, and concert venues spaces.

It’s important to note that some TULIP coverages have exclusions that are important to pay attention to be noted when researching policies. The specifics will depend on the type of coverage and the event.

For example, if you rent out a conference or meeting room and someone suffers bodily injury from a fall (those unruly computer cords can be hard to tame), associated legal and medical costs are typically covered under TULIP, because the incident occurred within the rented space. On the other hand, if the incident occurs on an organization’s property that’s not part of the rented space, coverage under TULIP does not apply.

Where Can I Get a TULIP Policy?

At the present time, the CSD Pool does not offer TULIP coverage to districts because the need has been minimal, since due to the fact that individuals have been able to purchased separate event coverage. If, in the future, districts need a solution for TULIP coverage then the CSD Pool will work towards a solution.

In the meantime, districts still need to perform best practices when working with a renters to limit liability to the district. If an organization is charging for the use of a space or venue, liability will be higher than if the space or venue is used free of charge. In both cases, people on an organization’s premises bring potential liability, and it is important to have a plan in place ahead of time on what coverage and policies are triggered in the event of a claim or legal issue.

For starters, any constituent or vendor that will be present on rented premises should be instructed to purchase a supplemental policy, if they do not already have adequate coverage in place. Secondly, districts should require that anyone renting out facilities should provide certificates or proof of coverage ahead of time. In some cases, renters may only have limited renters or homeowners coverage, but this may not be enough. When considering the policy needed by renters, take into account the size and nature of the event and venue.

TULIP coverage depends on the size and conditions of the rented venue, the number of guests, the insurability of involved parties, and the nature of the event—such as when it is taking place and what activities are conducted.

There are reasonable options available through a variety of different companies. Most often, TULIP coverages are provided as low-cost, short-term liability coverage. Costs can be as low as $100 with coverage limits up to $5 million. For more information, contact your broker, agent, or send us a message at info@csdpool.org.

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