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Commercial Lease Agreement: Insurance Requirements Crash Course for Renters

Commercial Lease Agreement: Insurance Requirements Crash Course for Renters

Ah, the thrill of finally finding the perfect office space. The location is right, the monthly rent is right, even the view is exactly what you hoped for. There’s just one thing standing between you and the keys: the commercial lease agreement. Amidst all the legal jargon about parking spaces and maintenance is the section about insurance requirements. Do you have the right kind? Do you have enough? Be sure to find out before you sign on the dotted line…   Are Those Requirements Really Required? Before a lessor or landlord can require you to provide proof of insurance, they must have a legally insurable interest in the items for which they are requesting coverage. Do they require contents coverage (property insurance)? If the landlord is providing or leasing furnishings or equipment to you (other than the building) they can require proof of contents coverage with them listed as the loss payee. Usually this is not the case, so the landlord cannot require this coverage. It is a good idea to have this coverage anyway, so please consult your insurance broker to find out how to include this coverage in your insurance portfolio. Do they require liability insurance? Some landlords may require that you carry “x” amount of liability insurance, and some may require that you name them as an additional insured on the policy. In the event of an injury on the tenant’s premises a plaintiff’s attorney will often sue the tenant, the landlord and anyone else associated with the premises. If the claimant was injured on your premises or due to your negligence, your landlord will want...