Insurance Requirements Lease Clause: Sample Language for Commercial Leases
Sample insurance clause language for commercial leases — coverage requirements, additional insured wording, waiver of subrogation, and the enforcement provisions most clauses forget. With attorney-review caveats throughout.
Travis
Diamond Flooring Starts Next Week
2 coverage gaps—we've reached out and resolved this before work begins.
- Emailed Vendor
- Verified with Insurance Broker
- Updated new COI in system
Diamond Flooring starts next week. Travis finds that the general liability limit needs an increase and the additional insured is not listed, emails the vendor, verifies coverage with the insurance broker, and updates the new COI in the system before work begins.
The insurance section of a commercial lease does its work years after signing, in the worst week of the tenancy — after the fire, the flood, or the injury, when carriers are deciding whose policy responds. Sample language below covers the pieces that section needs: the coverage requirements, the three protective provisions, and the enforcement mechanics that most inherited clause language quietly omits.
The obvious caveat, stated plainly: this is drafting scaffolding, not legal advice. Insurance clauses interact with state law (anti-indemnity statutes, subrogation rules), your asset type, and the rest of the lease — have your real estate attorney adapt anything you use. The value of a good sample is walking into that conversation knowing what each piece is for.
The coverage requirements
Tenant's Insurance. Tenant shall, at Tenant's sole expense, procure and maintain in force throughout the Term and any holdover: (a) Commercial General Liability insurance on an occurrence form, with limits of not less than $[1,000,000] per occurrence and $[2,000,000] general aggregate, including contractual liability coverage; (b) "Special Form" (formerly "all risk") property insurance covering all of Tenant's alterations, improvements, trade fixtures, equipment, and personal property within the Premises, at full replacement cost; (c) Workers' Compensation insurance in statutory amounts and Employer's Liability insurance of not less than $[1,000,000]; (d) Business Income and Extra Expense coverage of not less than [twelve (12)] months of Tenant's projected income from the Premises; [(e) for applicable uses: Liquor Liability / Umbrella liability of not less than $[X] / other use-specific coverage].
Calibrate (a) and (e) to use type — the office tenant and the restaurant should not share limits — and note "occurrence form" and "contractual liability": the first prevents claims-made gaps when a tenant's policy lapses after the term; the second makes the tenant's indemnity in the lease actually insured.
The three protective provisions
Additional Insureds; Primary Coverage. The liability policies described above shall name Landlord, Landlord's property manager, and their respective members, officers, and employees as additional insureds by endorsement, and shall be primary and noncontributory with respect to any insurance maintained by Landlord, whose insurance shall be excess and noncontributing. The entities to be named are: [exact legal names].
Mutual Waiver of Subrogation. Landlord and Tenant each waive all rights of recovery against the other, and against the other's members, officers, and employees, for any loss or damage to the extent covered (or required hereunder to be covered) by property insurance, and each party shall cause its property insurer to waive rights of subrogation accordingly.
Notice of Cancellation. Tenant's policies shall provide, by endorsement where required, not less than thirty (30) days' prior written notice to Landlord of cancellation or material reduction in coverage, and Tenant shall in any event notify Landlord within five (5) business days of any cancellation, non-renewal, or material change.
Drafting notes worth carrying into the attorney conversation: name the entities exactly (an additional insured endorsement for the wrong LLC protects nobody); "to the extent covered or required to be covered" in the waiver closes the gap where a tenant simply didn't buy the required property coverage; and the cancellation provision needs the tenant's own notification duty because carriers rarely promise certificate holders anything.
The enforcement mechanics (the part inherited clauses forget)
Evidence of Insurance. Prior to occupancy, and not later than ten (10) days prior to the expiration of any required policy, Tenant shall deliver to Landlord certificates of insurance evidencing the required coverage, together with copies of all required endorsements. Delivery of a certificate alone shall not constitute compliance with this Section.
Landlord's Remedies. If Tenant fails to procure, maintain, or evidence the required insurance within [ten (10)] days after written notice, Landlord may (without waiving any other remedy) procure such insurance on Tenant's behalf, and Tenant shall reimburse Landlord's cost plus an administrative fee of [X]% as Additional Rent. Tenant's failure shall constitute an Event of Default [after applicable cure periods].
These two paragraphs are what convert requirements into leverage: the endorsements-attached delivery standard is what makes verification possible, the renewal deadline creates the chase trigger, and the force-placement right is the remedy short of default that actually gets used. A requirements section without them is a wish list with a signature.
After the signing
A drafted clause is the ceiling of your protection; verification at move-in and every renewal is how much of it you actually have. The requirements above only bind if someone reads each incoming certificate — endorsements, entities, limits — against this lease's specific language and chases what's missing, tenant by tenant, across the portfolio. That standing verification loop is what Tightrope's agent Travis runs against your actual leases.
FAQ
Can I just use this language as-is? Use it as the working draft for your attorney — state law (especially on waivers and indemnity), your asset class, and your existing lease form all require calibration. The expensive mistake isn't imperfect wording; it's a clause nobody adapted or enforced.
What limits should the clause require? $1M/$2M GL is the common commercial floor; scale with use risk (restaurants, gyms, assembly) via umbrella requirements. Your insurance broker can benchmark by asset type — that's a better source than any template.
Should the clause require specific endorsement forms (CG 20 10 etc.)? Naming forms "or equivalent" adds precision your verification team will thank you for; pure form-number requirements can backfire as carriers issue proprietary equivalents. The delivery standard — endorsements attached, not referenced — matters more than the form numbers.
The clause sets the requirements; Travis verifies every certificate against them, lease by lease, renewal after renewal. Free plan at tightrope.ai/coi.