A commercial lease may stipulate that the landlord and tenant must maintain certain insurance policies for the duration of the lease. The required coverage depends in particular on the nature of the building, the activities carried out on the premises, and the allocation of risks specified in the lease.
The lease may require the tenant to maintain liability insurance covering risks related to their occupancy and activities on the leased premises. Depending on the circumstances, other protections may also be included, particularly regarding the tenant's property, leasehold improvements, business interruption losses, or other specific risks.
The landlord may, for their part, maintain certain insurance policies concerning the building. The lease should specify, where relevant, the respective responsibilities of the parties regarding insurance, as well as how certain premiums or premium increases may be assumed or allocated.
The lease may also include certain obligations regarding proof of insurance, maintaining coverage for the duration of the lease, and the obligation to notify the other party of certain changes that may affect insurance.
It is therefore important to carefully review the insurance clauses of the lease in order to determine the protections that must be maintained, the risks assumed by each party and the consequences of failing to maintain the required insurance.