At Rathbun Insurance, we frequently work with commercial property owners who lease space to tenants. One common question we hear is, “What insurance should I require from my tenants?”
If you're a landlord or property manager, including specific insurance requirements in your lease can help limit your liability and ensure tenants are properly covered. Here are the coverage types we typically recommend:
Tenant Insurance Requirements to Include in Your Lease
General Liability Insurance – This should be required. We recommend at least:
$1,000,000 per occurrence
$2,000,000 aggregate
$500,000 for damage to premises rented
$10,000 in medical payments
Property/Contents Insurance – This covers the tenant’s own business personal property inside the space.
Tenants Betterments and Improvements Coverage – This provides coverage for permanent improvements or fixtures installed by the tenant.
Additional Provisions to Require in Their Liability Policy
Your entity should be listed as an Additional Insured.
A Waiver of Subrogation should be included.
Require a 30-day notice of cancellation.
These provisions help ensure you’re protected and made aware if a policy is canceled or altered.
Best Practices for Collecting Certificates of Insurance
Always ask for a certificate of insurance, and request that it be sent directly from the tenant’s insurance agent. This avoids receiving outdated or incomplete documentation.
If you’d like us to review a certificate for compliance, we’re happy to do so at no cost.
Need a Referral for Tenant Coverage?
If your tenants aren’t sure where to go for insurance, feel free to refer them to us. We work with a variety of small businesses and can help them get the right coverage in place quickly.
If you’re a lessor’s risk client or property manager looking for more tailored guidance, give us a call. We’re here to help.
