Commercial Property3 min read

Commercial Property Insurance: Who Pays, Landlord or Tenant?

This is one of the most commonly searched commercial property insurance questions, and the honest answer is that there is no default rule, it depends entirely on what the lease says.

Unlike some areas of insurance with a clear legal default, responsibility for commercial property buildings insurance is set by the individual lease agreement, not by general law. It can sit with either party, and it varies significantly between leases.

The common arrangements

Why this needs checking, not assuming: A genuinely common and costly mistake is both landlord and tenant assuming the other party has buildings cover in place, only discovering neither does after a claim event. The lease's insurance clause is the only reliable source of truth here.

What to check in the lease

Look specifically for the insurance clause, it should state clearly who arranges buildings cover, whether the cost is recharged, and what happens to that arrangement if the building is destroyed or made unusable. If it is ambiguous, get it clarified in writing before relying on an assumption.

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Responsibility for buildings insurance is determined by the specific lease. This guide is general information, not legal advice, always check your lease directly.