Tenant Insurance from a Landlord's Perspective

In my experience, I have learned not to be surprised with a landlord’s answer to two questions: 1. whether it has evidence of insurance from the tenant and 2. whether it is consistent with the insurance terms in the lease. Too often, the answer to both questions is "No". This applies to individual landlords, closely-held private landlords and even, on occasion, publicly-held landlords.

We take out insurance on our properties, on our cars, on our lives, and to protect our ability to earn a living in our occupation. It follows that tenants should carry insurance to protect their property and ability to carry on business to meet their lease obligations and to protect others in the event of 3rd party liability claims.

Typical commercial leases provide for various types of insurance to be taken out and paid for by the tenant, coverage amount minimums, parties to be covered, and occasionally, certain riders or endorsements depending on the facts.

Below are 5 points that every commercial landlord (and lender) needs to consider at a minimum when dealing with tenant insurance. (Keep in mind that I am not an insurance expert and I welcome comments from those in insurance /risk management fields).

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