This is the second article in the series that highlights insurance from a commercial tenant’s perspective: what the tenant should be taking care of with respect to their own 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

Who purchases insurance for the Landlords’ Property?

The simple answer is, both the Landlord and the Tenant.

The Landlords’ policy insures the Landlords’:

• Building and its’ equipment, fixtures
• Outbuildings and structures on the premises
• Contents of all description in common areas
• Business Interruption and Lost Rents
• Liability to other parties
• Boiler and Machinery

The Tenants’ policy should insure the Landlords’:

• Building for Tenants’ Legal Liability – which is damages to Tenants’ leased space, as the Landlord has the right of recovery from the Tenant, if the Tenant or their employee is responsible for the damages
• Building for Tenants’ Improvements – as the improvements become the property of the Landlord at the termination of the lease
• Building for Legal Liability – if the Tenant is legally responsible for damages to the building and lost rents, which is not in the care custody and control of the Tenant (other than the leased space), the Landlord has the right of recovery from the Tenant
• Liability to Individuals entering the premises – if the Tenant is legally responsible, to people who fall, or are otherwise injured on the premises