What insurance does a commercial landlord require from a tenant?

By Mark Melliand, owner, Melliand Insurance Agency · 13 years as an independent agent · Published October 18, 2026

Most commercial leases include an insurance section that spells out what the tenant must carry, at what limits, and how the landlord must be protected. There’s no single standard. Requirements vary from lease to lease, and they can be negotiated before signing. The only reliable answer for your space is in your lease, so review its insurance provisions, ideally with your attorney and your insurance agent, before you sign.

The short answer: Many commercial leases ask the tenant to carry general liability insurance and to insure its own business property. Some also require business income, workers’ compensation, or umbrella or excess liability coverage. Leases often ask that the landlord be named as an additional insured, and may call for primary and noncontributory wording and a waiver of subrogation. Your lease decides which of these apply to you.

The landlord’s insurance and yours cover different things

A landlord typically insures the building it owns. That policy protects the landlord’s interest. It generally isn’t designed to cover your inventory, equipment or furniture, your lost income after a loss, or claims made against your business. Those are your exposures as the tenant.

One gray area is improvements you pay for, such as built-in counters, flooring or a finished-out suite. Once permanently installed, these often become part of the building, but many leases make the tenant responsible for repairing or replacing them after a loss. A tenant’s business property coverage may address its interest in those improvements and betterments. Coverage depends on the policy’s definitions, limits, valuation provisions and the tenant’s insurable interest. Review the lease and policy together to determine who is responsible. (Stoel Rives)

For an overview of how a business owner’s policy commonly packages property, liability and business income coverage, see our guide to what a business owner’s policy covers and what requires separate coverage.

Coverages leases commonly ask for

Not every lease requires every item below. These are common requests, not a checklist that applies to all tenants.

General liability. This responds to claims that your business caused bodily injury or property damage to others, such as a customer who trips in your space. Leases often specify minimum limits and ask that the landlord be named as an additional insured. (Stoel Rives)

Business property. This insures your own contents, such as inventory, equipment, furniture and fixtures, and may address your interest in improvements and betterments. A commercial property policy pays to repair or replace covered property damaged by events the policy covers. (Texas Department of Insurance)

Business income. This helps replace lost income, and with extra expense coverage, some of the added costs to get running again, when covered damage interrupts your business. In Texas commercial property policies it’s typically an optional addition. Some leases require it, partly because rent may still be due while you’re closed. (Texas Department of Insurance)

Workers’ compensation. Most private employers in Texas may choose whether to carry workers’ compensation. Employers that don’t, often called non-subscribers, still have notice and reporting duties. A lease can still require it as a condition of renting, so check before assuming it doesn’t apply. (Texas Division of Workers’ Compensation)

Umbrella or excess liability. If a lease requires liability limits higher than your underlying policies provide, umbrella and excess policies can both add limits. They aren’t interchangeable. An excess policy generally follows the terms of the underlying policy and adds limits. An umbrella policy also adds limits, but its terms can differ from the underlying policy. Each has its own requirements for the underlying policies and their limits, so check which one your lease names. (Acrisure)

Lease wording to look for

Additional insured. Being named an additional insured gives the landlord certain rights under your liability policy, usually for claims arising from your operations or your use of the space. That status has to come from your policy, usually through an endorsement. A certificate can’t create it. (Texas Department of Insurance, FAQ 1 and 15)

Primary and noncontributory. This wording affects how your policy responds to the landlord as an additional insured, for claims that fall within the applicable additional insured coverage. For those claims, “primary” means your policy responds before the landlord’s own liability insurance, and “noncontributory” means your insurer won’t seek to share the cost with the landlord’s insurer. It doesn’t mean your insurer pays every claim involving the landlord. The result depends on the specific endorsement wording, and umbrella or excess policies may need it addressed separately. (IRMI)

Waiver of subrogation. After paying a claim, an insurer can sometimes pursue the party that caused the loss. A waiver of subrogation gives up that right against the other party. Leases often make the waiver mutual between landlord and tenant. Not every policy permits it automatically, and some require an endorsement, so check with your agent before you sign. (Mondaq / Capes Sokol; Texas Department of Insurance, FAQ 2 and 16)

Certificate holder vs. additional insured

Your landlord will usually ask for a certificate of insurance. A certificate is evidence that your coverage exists. It doesn’t change your policy, and being listed as the certificate holder doesn’t give the landlord rights under it. If the lease requires additional insured status, a waiver of subrogation or primary and noncontributory wording, those have to be in your policy, usually through endorsements. In Texas, a certificate can’t say more than the policy does. (Texas Department of Insurance)

To check a specific business owner’s policy against your lease, see our guide to whether a BOP will meet your commercial lease’s insurance requirements.

Notice of cancellation

Some leases ask that the landlord be notified if your coverage is canceled. Whether that notice is given depends on your policy, its endorsements and applicable law. In Texas, a certificate can’t promise notice that the policy doesn’t provide. If your lease requires notice, ask your agent whether your policy can provide it. (Texas Department of Insurance, FAQ 5)

Coverages that may need separate consideration

Flood. Standard commercial property insurance generally excludes flood. Ask whether separate flood coverage is required by the lease or appropriate for your location, and confirm its effective date. (Texas Department of Insurance)

Wind and hail on the Texas coast. For businesses along the Texas coast, a commercial property policy may not cover wind and hail, and separate coverage may be needed. (Texas Department of Insurance)

Hired and non-owned auto. General liability generally doesn’t respond to auto accidents. Hired and non-owned auto liability coverage generally protects the business against covered liability arising from qualifying hired or non-owned vehicles used for business, such as an employee’s car used for a work errand. Which vehicles and drivers qualify depends on the policy. Physical damage to those vehicles requires separate consideration. Learn more about business auto liability when employees use their own cars.

Coverage for your specific operations. Depending on what you do in the space, a lease may ask for coverage tied to your use, such as liquor liability for a bar or restaurant. (Stoel Rives)

Two hypothetical examples

These examples are illustrations, not real clients, and they aren’t a statement of what any policy will cover.

A retail shop in a strip center. The lease asks for general liability with the landlord as an additional insured on a primary and noncontributory basis, business property for inventory and fixtures, and a mutual waiver of subrogation. The tenant’s agent reviews the insurance section, confirms which endorsements the insurer can add, and points out that a certificate alone won’t satisfy the additional insured requirement.

A professional office finishing out a suite. The tenant spends significantly on build-out. The lease makes the tenant responsible for restoring those improvements after a loss and requires business income coverage. The agent reviews how the lease and the policy each treat the improvements, and reviews business income options. The landlord’s building policy and the tenant’s policy each protect different interests in the same space.

What to send your agent

To compare your lease requirements with available coverage, send:

  • The lease’s insurance provisions, including any exhibits on insurance, indemnity or waivers. The full lease is often helpful.
  • A description of your operations in the space
  • The property location and type of space
  • Your requested start date, including when you receive access, begin work or take possession, and any insurance deadline in the lease
  • Relevant property values: inventory, equipment, furniture and fixtures, and the cost of any improvements you’re paying for

Please don’t include Social Security numbers, bank or card numbers, or other sensitive ID numbers when you send documents by email or a website form.

Ready to review your lease requirements?

Request a business insurance quote → or call (972) 346-4666, Monday–Friday, 8 AM–5 PM Central. In-person visits are available by appointment at your business throughout the Dallas–Fort Worth area.

References

Lease requirements vary. This guide is general information, not legal advice or a statement of coverage, eligibility or price. Have your attorney review lease terms, and confirm coverage details with your agent before signing.