Tenants – Are You Fully Covered for Disaster?

Tenants need to be fully clued up on the insurance provisions of their lease as in the event of disaster any ambiguity could lead to a tricky situation.

When entering into a commercial lease it is imperative that tenants ensure that insurance provisions are explicitly covered.  Leases usually state that the Landlord is to insure the whole of the Property with the Tenant repaying the cost through an insurance premium direct to the Landlord.   A Tenant will only generally be responsible for the insuring of plate glass.

It is important that tenants check any insurance policy carefully to make sure that the level of cover is suitable, that all necessary risks are covered and the terms they need to comply with. If a tenant breaks the terms of the insurance policy leading to it becoming void then it will often be required to cover the amount not paid out by the insurers.

In addition it is important that rent suspension is covered properly under the Lease should the property become unfit for occupation. It would not be ideal for a tenant to be paying rent when it cannot use the property. The Lease should also provide that the Landlord use any insurance monies to reinstate the property.

If you are a tenant of part of a building it is also crucial that you ensure that the remainder of the building is insured by the Landlord. This enables the building to be rebuilt as one rather than each tenant sorting out its own premises individually.

The Commercial Property Team at Forbes Solicitors offer a fixed fee lease report which will include information on the insurance provisions of a property. For further information contact our Property Solicitors on 0800 689 0831 or make an enquiry here.

Laura Bradley

About Laura Bradley

Laura Bradley is a Solicitor in the Commercial Property department at Forbes Solicitors. Within her blogs Laura deals with all aspects of commercial property including leases (from both landlord and tenant perspective), licences, acquisitions and disposals along with recent updates within the property sector.
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