Why is my landlord requiring me to have Business Insurance? I get this question a lot since lease terms can have many insurance details. Some of which new business owners or veteran business owners are not familiar. Below are a few insurance coverages your landlord might require you to have when you sign a lease.
General Liability Insurance
Your landlord has their own General Liability Insurance to cover their exposure and business. Meaning, their insurance company has a full understanding of what they do. They do not know what the tenants do, so they are not going to cover a risk they know nothing about. Since the building owner could be brought into a potential lawsuit, they are going to want you to have this coverage in force upon lease execution. In addition to having General Liability Insurance, they may also require you to have them, the landlord, listed as an Additional Insured and have a Waiver of Subrogation on the policy.
If there's a fire, and your business isn't operational, you most likely won't be able to pay rent, so your landlord may also require you to have Business Interruption/Business Income. This coverage could be a specific amount or ALS (Actual Loss Sustained).
Business Personal Property
If a loss occurs on premises, your landlord is going to want you to have insurance for your property. Business Personal Property is going to provide this coverage this coverage.
Employees get injured. The last thing a property owner wants is to be brought into a lawsuit for an injury that occurred on the premises. To reduce this exposure, they might require the tenant to have a Workers Compensation policy. Although it's not required in Texas, they still might want you to have it.
Other requirements I have seen, A+ Rated Carrier, Waiver of Subrogation, Tenant Glass, and Umbrella. If you have any questions about these coverages, please feel free to call or email me. When signing a lease, you have a lot to deal with as far as requirements go, we are here to help with the Business Insurance.
Commercial Insurance Agent