Insurance Requirements in a Commercial Lease

Almost all commercial leases require the tenant to have adequate insurance, even though the landlord almost always carries their own umbrella insurance. Most commercial leases require that a tenant have enough insurance to provide coverage of at least $1,000,000.00 of coverage per occurrence and at least $2,000,000.00 of coverage in the aggregate.

Having adequate insurance is wise to cover your assets and business but failing to maintain the minimum insurance required by a lease will result in a breach of the lease. In most cases, a breach of the insurance provision of a lease will cause you to be in default of the lease, which would allow the landlord to terminate the lease and/or evict you.

The insurance provision of a commercial lease is just one of many clauses that need detailed review and negotiation.

If you would like to discuss how we can help you draft, review, and/or negotiate a commercial lease on your behalf, please call Kapadia & Naik at 770-881-8081.