My landlord requires insurance — what do I do?
Find the insurance clause in your lease and send it to your agent before you sign. Almost every clause asks for the same five things: minimum liability limits, the landlord named on your policy, a promise your insurer won't sue the landlord, property coverage on your improvements and contents, and notice if your policy is cancelled.
- Read the insurance article, the indemnity article and any insurance exhibit together; they work as one clause.
- The limit and the notice period are usually negotiable; being named on your policy usually isn't.
- Price the clause before you sign: a limit above what you carry, or wording that makes your policy pay first, can cost real money.
Where is the insurance part of my lease?
Usually in three places: an article titled "Insurance," an article titled "Indemnity" or "Indemnification," and often an exhibit at the back with the exact limits and wording. Read all three before you sign.
The insurance article lists what you must carry. The indemnity article is your promise to cover the landlord's costs if a claim comes out of your space. The two are built to fit: a lease typically has the landlord and the tenant each carry their own liability policy, with the indemnity promise assigning each claim to the side that insures it. (Source: Eidson, continuing legal education paper on commercial leases, 2017) When the numbers sit in an exhibit, the exhibit controls, so send your agent the whole package, not one page.
What does almost every insurance clause ask for?
Five things, in plain words: enough liability coverage, the landlord added to that coverage, a promise your insurer won't go after the landlord, insurance on what you own in the space, and notice if your coverage ends.
- Minimum liability limits: two numbers. The most your liability coverage pays for any one incident — the per-occurrence limitPer-Occurrence Limit The most your policy will pay for a single incident, no matter how many people are hurt or make claims. Insurers call it the per-occurrence limit. more → — and the most it pays for all claims in a year, the aggregate limitAggregate Limit The most your policy will pay for all claims combined during the policy year, no matter how many there are. Insurers call this the aggregate limit. more →.
- The landlord named on your policy: the landlord is added to your liability coverage for claims tied to your space, which makes it an additional insuredAdditional Insured Another person or business covered under your liability policy for claims tied to your work or property, such as a landlord or general contractor. Insurers call them an additional insured. more →. That status exists precisely for parties such as the owner of a building you lease. (Source: International Risk Management Institute)
- No suing the landlord: after paying your claim, an insurer can normally go after whoever caused the loss. Here you give up that right on the landlord's behalf — a waiver of subrogationWaiver of Subrogation A policy add-on where your insurer gives up the right to pursue a party you agreed by contract not to blame after a loss. Insurers call it a waiver of subrogation. more →. Your insurer has to agree to it, usually by a standard add-on.
- Property on your improvements and contents: the landlord typically insures the shell and common areas; you insure your equipment, inventory and furnishings, and often the build-out you paid for. Your property coverage needs a value for each.
- Notice of cancellation: the landlord wants to hear, usually 30 days ahead, if your policy is cancelled or not renewed.
Which parts of the clause can I negotiate?
The limit and the notice period most often move. Being named on your policy, the waiver and insuring your own property usually don't.
The limit. Ask to match what you already carry, or to count an umbrella toward the total. Get the wording exact, too: in one 2022 commercial court case, a lease asking for $2 million in a "single limit" was met by a policy paying $1 million per incident and $2 million a year, because the lease never said which. (Source: Schlam Stone & Dolan)
The notice. Insurers rarely promise to warn a landlord anymore; those commitments on proof-of-insurance forms are generally no longer available. (Source: Eidson, 2017) Offer instead to give the notice yourself.
The waiver. You likely can't strike it, but you can ask that it run both ways, so the landlord's insurer gives up the same right against you.
What do I send my landlord to prove I'm covered?
A certificate of insurance plus copies of the add-ons that name the landlord and waive your insurer's rights. Not the whole policy.
The certificate is a one-page summary your agent issues; our guide to what a certificate of insurance is covers it in full. The certificate alone doesn't do much: the standard form says it is issued for information only and confers no rights on the holder. (Source: Eidson, 2017) What changes your policy is the written add-on attached to it — insurers call it an endorsementEndorsement A written change attached to your policy that adds, removes, or alters coverage partway through the term. Insurers call it an endorsement.. Landlords who know this ask for both. Your full policy shows your pricing and every other coverage you carry, and the lease almost never requires it.
Which lease requests cost the most to say yes to?
Two: a liability limit above what your policy carries, and wording that makes your policy pay first. Agreeing to every request without pricing it is the third.
A limit you can't meet cheaply. If the lease wants more than your policy carries, the usual fix is umbrella coverage over the top. Get it quoted before you sign, not after.
"Primary and non-contributory." In one sentence: your policy pays first on a claim at your space, and the landlord's own insurance doesn't chip in — insurers call this primary and non-contributoryPrimary and Non-Contributory A contract-required setting where your policy pays first on a claim and does not ask the other party's insurance to share. Insurers call it primary and non-contributory.. It is contract wording that sets the order in which policies respond. (Source: International Risk Management Institute) Writing it into the lease doesn't bind your insurer; it has to be in your policy's add-on, and not every policy allows it.
Saying yes to everything. Each add-on, a higher limit and an umbrella can carry a charge. The bigger risk is an indemnity promise wider than your insurance, which leaves you personally exposed for whatever your policy won't pay. Have your agent mark each request as covered, coverable at a price, or not insurable, before you sign.
Common questions about a landlord's insurance requirements
Tell the landlord and your agent early. Many leases treat missing insurance as a default, and some let the landlord buy coverage and bill you for it. Ask for a written amendment or waiver rather than letting it slide.
No. The landlord is named on your liability coverage and often on an umbrella. Your property coverage protects your own things, so the landlord appears there only if you insure part of the building.
It can. A lease renewal or a new landlord may come with higher limits or new wording. Send the renewal lease to your agent the same way you sent the first one.
Have a lease in hand? Send us the insurance clause before you sign.
We'll mark what your current coverage already meets, what it would cost to meet the rest, and what's worth pushing back on.