Key Insurance Considerations for Commercial Landlords
Commercial landlords often focus on terms like rent and renewals when negotiating leases, but overlooking insurance provisions can expose them to significant risks. Insurance clauses safeguard property and financial interests, making them critical elements of any lease.
Key Considerations for Landlords:
- Repair Responsibilities: Clearly define whether tenants or landlords handle repairs to structural and non-structural elements.
- Essential Policies: Consider rent loss insurance, improvements, and betterments coverage, and code-mandated change endorsements.
- Tenant Requirements: Require tenants to maintain general liability, property, and workers’ compensation insurance, with landlords named as an “additional insured.”
- Subrogation and Valuation: Include mutual waivers of subrogation and evaluate whether replacement value policies better align with your needs.
- Regular Reviews: Periodically assess insurance provisions to ensure they meet current property and tenant requirements.
Well-crafted insurance provisions protect your assets and reduce risks. For a deeper dive into structuring effective leases, read Negotiating Insurance Provisions for Commercial Landlords (originally published in the Daily Journal of Commerce on December 3, 2024).