This is the third article in the series that highlights insurance from a tenant’s perspective: what the tenant should be taking care of with respect to their tenant insurance needs. As an owner, you should be aware of this so that your insurance plan dovetails appropriately with the tenant’s perspective and responsibilities.

Disclaimer: These articles are intended to raise questions to review with your insurance provider or legal advisor. This article is not an insurance sales solicitation, legal advice or to be considered a comprehensive evaluation of all tenant risks.
Provided by Sterling Insurance Associates Ltd. – a consulting company

What insurance obligations are there in the Tenants’ lease?

Maintain insurance for the full term of the lease, including:

• Insurance providing “all risk”, plus earthquake and flood, full replacement cost coverage for the Tenants’ property
• Liability to other parties for Property Damage and Bodily Injury
• Tenants’ Legal Liability
• Non-Owned automobile coverage
• Cross liability, in effect treating the Landlord and Tenant as having “separate coverage”
• Listing the Landlord as an “additional insured” with respect to premises liability

Also, the Tenant is agreeing to:

• The Tenants’ liability insurance is primary and will not call upon Landlords’ insurance to contribute to any loss
• The Tenants’ insurance has a waiver of subrogation (or recourse) against the Landlord, regardless of Landlords’ negligence
• The Tenants’ insurance policy contains a 30 day prior to cancellation or lapse notice provision to the Landlor
• The Tenant will provide copies of the Tenants’ insurance policy to Landlor
• The Landlord has the right to place insurance per Tenants’ responsibility if Tenant fails to do so

Compliance with Landlords’ insurance, being:

• Tenant cannot use the premises to perform operations that conflict with the Landlords’ risk category; such as operating a welding shop in an office building

Loss or Damage that occurs as a result of a Tenants’ act or omission:

• The Tenant will indemnify the Landlord for all losses or claims made against the Landlord, as a result of injuries or damages occurring in or about the Tenants’ premises or the Landlords’ property

The Landlords’ Insurance does not protect the Tenant:

• The Tenant is not an insured under the Landlords’ policy, and has no insurable interest in Landlords’ property

Review article 1 in this series on tenant insurance

Review article 2 in this series on tenant insurance