🏢 Commercial Tenants & Lease-Required Insurance in Canada: What You Need to Know
Signing a commercial lease isn’t just about rent and square footage—it comes with critical insurance obligations. Overlooking these requirements can expose both tenants and landlords to significant risk.
📄 What Do Leases Typically Require?
Most Canadian commercial leases contain insurance clauses that obligate tenants to carry:
✅ Commercial General Liability (CGL).
✅ Tenant’s Legal Liability coverage.
✅ Business Interruption Insurance.
✅ Property Insurance for contents, equipment, and leasehold improvements.
✅ Proof of insurance, naming the landlord as Additional Insured.
⚠️ Common Pitfalls for Tenants
• Assuming the landlord’s policy covers your property or operations.
• Failing to meet minimum required coverage limits.
• Overlooking the need to insure leasehold improvements.
• Missing key endorsements (e.g., waiver of subrogation, cross-liability clauses).
💡 Landlords Need to Stay Proactive Too
• Routinely verify tenant insurance certificates.
• Keep lease language current with emerging risks (e.g., cyber threats, flood exposure).
• Work with insurance brokers to close coverage gaps and reduce liability.
🛡️ A well-structured lease insurance clause protects both parties—and prevents costly surprises when claims arise.
📣 Whether you’re a landlord or a tenant, it’s worth reviewing your lease with a qualified insurance advisor to ensure you’re not unintentionally underinsured.
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