What Agents Need to Know When Working With Landlords and Tenants 

Commercial property lease agreements go far beyond rent and square footage. They are legally binding contracts that allocate risk between landlords and tenants, and those allocations often carry significant insurance obligations. 

For insurance agents, understanding how these provisions work is essential to placing appropriate coverage while staying within the boundaries of your role. If you work with landlords, tenants, or both, your value lies in recognizing how lease terms impact risk, identifying potential coverage gaps, and helping clients secure insurance that aligns with their contractual responsibilities. 

Why Lease Agreements Matter 

At their core, lease agreements determine who is responsible for property damage, liability claims, and financial losses following an incident. The insurance provisions within these agreements typically outline: 

• Who insures the building, tenant improvements, and contents 
• Who is responsible for liability arising from operations or the premises 
• How losses are handled when multiple policies apply 
• Whether one party must indemnify or hold harmless the other 

When these provisions are misunderstood or overlooked, clients may unknowingly assume risks that are not properly insured. Key takeaway: A lease does not change what an insurance policy covers, but it can change what your client is required to insure. 

Common Insurance Provisions Agents Should Understand 

Most commercial leases include several insurance-related requirements that agents should be prepared to address as part of their advisory role. 

• Required Coverages and Limits
  Leases often require specific coverage types, such as commercial general liability, property insurance, business income, workers’ compensation, or umbrella liability, along with minimum limits. 
• Additional Insured Requirements
  Tenants are frequently required to name landlords as additional insureds on liability policies. The specific endorsement language matters, particularly when it comes to ongoing versus completed operations. 
• Waiver of Subrogation
  Many leases include provisions requiring insurers to waive recovery rights against the other party. These provisions typically require policy endorsements and should be reviewed carefully. 
• Indemnification Clauses
  Indemnification language can shift liability in ways that go beyond what standard insurance policies cover. While agents should flag potential concerns, interpretation should be left to legal counsel. 
• Tenant Improvements and Build-Outs
  Responsibility for insuring improvements and betterments is a common source of confusion and coverage gaps. Agents should help clarify insurable interest and ensure appropriate values are scheduled. 
• Certificates of Insurance
  Landlords often rely on certificates of insurance to verify compliance. However, it is important to remember that certificates do not amend or extend policy coverage. 

Considerations for Landlords and Tenants 

Both parties face unique challenges when it comes to lease-driven insurance requirements. 

For Landlords
Landlords should confirm that tenants maintain required coverage throughout the lease term. They should also review their own policies for potential gaps related to common areas, vacancy exposures, and assumed liabilities. 

For Tenants
Tenants often underestimate the scope of their insurance obligations within a lease. Agents can provide valuable guidance by helping them understand these requirements before signing and recommending legal review when provisions appear unclear or excessive. 

Understanding Common Lease Structures 

Agents will encounter several types of commercial lease agreements, each shifting financial responsibility in different ways: 

• Gross Lease: The tenant pays rent, while the landlord covers most operating expenses. 
• Single Net Lease: The tenant pays rent, utilities, and property taxes. 
• Double Net Lease: The tenant pays rent, utilities, property taxes, and building insurance. 
• Triple Net Lease: The tenant assumes extensive responsibility, including rent, utilities, property taxes, insurance, and maintenance for the building and common areas. 

Understanding these structures helps clarify how insurance responsibilities are typically distributed. 

Staying Within Your Role 

Commercial leases sit at the intersection of legal liability and insurance protection, which makes it especially important for agents to stay within their lane. 

Agents should avoid interpreting contract language or advising on enforceability. Instead, a simple and effective approach is to say: 

“This lease provision may create insurance obligations that are difficult or costly to insure. You may want legal counsel to review this before signing.” 

Where Agents Add Value 

Agents play a critical role when they: 

• Identify how lease terms impact insurance requirements 
• Explain coverage options and limitations clearly 
• Encourage coordination with legal counsel when needed 

When agents are involved early, especially before a lease is signed, they can help clients avoid uninsured losses, unexpected liabilities, and potential errors and omissions exposure. 

For additional information, visit resources offered through the Big “I” on navigating insurance on commercial property requirements. 

Download the Agent Checklist
A downloadable checklist on Commercial Lease Agreements and Insurance Requirements is available to help agents stay in an advisory role while reducing coverage gaps and E&O risk. 

About the Author

Jeannine Giesler, CISR, CPIA, and past President of the OIA Board of Directors, Foundation for the Advancement of Insurance Professionals, currently serves as Resource Center Advisor for the OIA. The purpose of the Resource Center is to contribute to building a comprehensive library of resource materials for our members. We pride ourselves on being the one-stop shop for all OIA members and work to solve every problem or situation you may come across.

Cited Resources: 

Further Reading & Resources: (For additional industry context; not all were directly cited in the article)

Back to Basics – Navigating Insurance Requirements in Commercial Property Lease Agreements
Author: Nancy Germond
Date: June 24, 2025 Publisher: Independent Agent / IIABA

Additional Insured Status and Waivers of Subrogation
Date: January 13, 2022 Author: Mark Bell
Publisher: IRMI (International Risk Management Institute)

Tenants’ Improvements and Betterments—Important Considerations
Date: October 25, 2024 Author: Catherine L. Trischan
Publisher: IRMI

The Indemnification Clause in a Commercial Lease
Date: Not dated  Author: Lisa Brennan
Publisher: Way Law

Certificates of Insurance: Best Practices for Real Estate
Date: September 27, 2024 Author: BCS Editorial Team
Publisher: BCS

https://www.getbcs.com/blog/certificates-of-insurance-best-practices-for-real-estate