A property manager for a retail plaza in Burlington, Ontario, receives notification that the plaza's Commercial General Liability (CGL) policy is up for renewal and includes a new 'roof exclusion' clause. The plaza's roof is 25 years old. What advice should the property manager provide to the owner, considering risk mitigation and tenant relations?

Question: A property manager for a retail plaza in Burlington, Ontario, receives notification that the plaza's Commercial General Liability (CGL) policy is up for renewal and includes a new 'roof exclusion' clause. The plaza's roof is 25 years old. What advice should the property manager provide to the owner, considering risk mitigation and tenant relations?

Answer options: ✅ Strongly recommend assessing the roof's condition, budgeting for potential replacement, and investigating alternative insurance options or specific endorsements, as this exclusion significantly increases owner liability for roof-related damages.

• Advise the owner to accept the exclusion as a cost-saving measure, assuming roof issues are unlikely.
• Inform the owner that this exclusion means tenants will now be responsible for all roof repairs and related damages under their leases.
• Suggest increasing the property manager's professional liability insurance to cover potential roof-related claims.

Correct answer: Strongly recommend assessing the roof's condition, budgeting for potential replacement, and investigating alternative insurance options or specific endorsements, as this exclusion significantly increases owner liability for roof-related damages.

Explanation: A roof exclusion clause in a CGL policy for an aging roof represents a significant uninsurable risk for the owner. The property manager must alert the owner to this heightened exposure, advising proactive measures like roof assessment/replacement planning, or seeking specialized insurance coverage to mitigate against substantial potential financial losses and maintain good tenant relations.