Lenders & Contracts · Insurance Term
Lease Insurance Requirements (Lease Insurance Clause)
Definition
Lease insurance requirements are the sections of a commercial lease that say what insurance the landlord and tenant must each carry, at what limits, and how they protect each other. They decide who pays when something goes wrong at the property.
In Plain English
A typical commercial lease tells the tenant to carry general liability, insurance on its own contents and improvements, and sometimes business income. It often requires the tenant to name the landlord as an additional insured and to send a certificate of insurance each year. The landlord usually agrees to insure the building itself.
Many leases also include a waiver of subrogation, where each side waives its insurer's right to sue the other after a covered loss. That keeps insurers from turning a fire into a lawsuit between landlord and tenant. Your policy should allow the waiver, or you could create a coverage problem.
Under a triple net lease, the tenant usually reimburses the landlord's property insurance cost, so the lease may also set rules on deductibles and who pays them. Mismatches between the lease and the actual policies are common and are best caught before a loss.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical: a lease requires a restaurant tenant to carry $1,000,000 per occurrence general liability with the landlord as additional insured. The tenant's certificate shows only $500,000 and no additional insured. If a customer is injured, the landlord may be left defending the claim under its own policy.
What to Watch For
- Put each lease's insurance requirements into a simple checklist and compare it to the tenant's certificate.
- Check that your own policy allows the waivers of subrogation you signed.
- Track certificate expiration dates and request updates at each tenant renewal.
- Make sure lease requirements match what your lender requires of you.
Common Questions
Does my tenant's insurance cover my building?
Usually not. A tenant's policy generally covers the tenant's own liability, contents and improvements, while the landlord insures the building. The lease spells out who insures what.
Is a certificate of insurance enough proof?
A certificate is a summary and does not change the policy. For key tenants, ask for the additional insured endorsement itself, and confirm limits and dates match the lease.
Last updated October 14, 2026 · Primesure editorial team · How We Write