Before a tenant occupies a leased space, landlords, property managers, and building owners should request a current Certificate of Insurance, or COI, that matches the insurance requirements in the lease. At a minimum, the COI should show the tenant’s legal name, leased property address, active policy dates, required liability limits, certificate holder information, additional insured wording, and any endorsements required by the lease.
A COI is not the policy itself. It is a summary of coverage. That is why the lease should clearly state what insurance is required, who must be protected, what limits apply, and when proof must be provided.
Here are the basic elements that should be reviewed in every tenant COI requirement:
Tenant Legal Name
The tenant’s legal name on the lease should match the insured name on the certificate. If the tenant signs the lease as an LLC, corporation, or partnership, the COI should not list only a trade name or store name.
If the tenant has a “doing business as” name, that name can be included, but the legal entity responsible for the lease should be shown clearly.
Property Address
The leased premises should be identified on the COI or in the description of operations. This helps connect the insurance certificate to the actual location being leased.
For tenants with multiple locations, this detail is especially important. You do not want a certificate that applies to a different building, office, store, warehouse, or unit.
General Liability Insurance
Commercial general liability insurance is usually the first coverage requested from a tenant. This can respond to certain claims involving bodily injury, property damage, and personal or advertising injury related to the tenant’s business operations.
A common lease requirement may ask for limits such as $1,000,000 per occurrence and $2,000,000 aggregate, but the right amount depends on the property, tenant use, foot traffic, and risk involved.
Additional Insured vs. Certificate Holder
The landlord should usually ask to be named as an additional insured on the tenant’s general liability policy. Depending on the lease, this may also include the property owner, management company, mortgagee, members, partners, affiliates, or other related parties.
Being listed as a certificate holder is not the same thing as being an additional insured. A certificate holder receives proof of coverage. An additional insured may receive certain protection under the policy, subject to the terms and endorsements.
Certificate Holder
The certificate holder section should list the proper landlord, property owner, or management company name and mailing address.
This section should be accurate. If the landlord entity in the lease is different from the building manager or ownership company, the lease should explain who must appear as certificate holder and who must be included as additional insured.
Policy Effective Dates
The COI should show active policy dates. The policy should begin before the tenant moves in, starts construction, opens for business, or brings employees and customers onto the premises.
If the lease renews every year, the tenant should provide an updated COI before the old policy expires. A certificate with expired dates should not be accepted as current proof of insurance.
Required Limits
The lease should state the minimum insurance limits that the tenant must carry. This may include general liability, umbrella or excess liability, auto liability, workers’ compensation, employers liability, and property insurance.
The COI should be reviewed to make sure the limits shown meet or exceed the lease requirements. If the lease asks for $2,000,000 and the certificate only shows $1,000,000, the tenant may need an umbrella or excess liability policy.
Umbrella or Excess Liability
Some tenants need more liability coverage than the primary general liability policy provides. An umbrella or excess liability policy can provide additional limits above the underlying policies.
This is often useful for restaurants, fitness centers, medical offices, event spaces, industrial tenants, retail stores, or any business with higher foot traffic or greater claim exposure.
Workers’ Compensation
If the tenant has employees, the lease may require workers’ compensation insurance as required by state law. Employers liability coverage may also be listed on the COI.
This helps confirm that the tenant has coverage for employee injury claims and that these claims are not pushed toward the landlord or property owner.
Business Auto Liability
If the tenant uses vehicles for business purposes, the lease may require business auto liability coverage. This can apply to owned, hired, and non-owned autos.
Even if the tenant does not own company vehicles, hired and non-owned auto coverage may be important if employees use personal vehicles or rented vehicles for business errands, deliveries, or client visits.
Tenant Property Insurance
The lease should explain who is responsible for insuring tenant improvements, furniture, equipment, inventory, machinery, stock, signs, fixtures, and personal property.
The landlord’s building policy usually does not cover the tenant’s business property. Tenants should understand that their own property, inventory, and business equipment may need separate coverage.
Improvements and Betterments
If the tenant builds out the space, installs fixtures, adds flooring, improves lighting, or makes other upgrades, the lease should state who insures those improvements.
Some improvements become part of the building. Others remain the tenant’s responsibility. This should be discussed before the build-out begins, not after a loss occurs.
Waiver of Subrogation
A waiver of subrogation means the insurance company gives up certain rights to recover money from another party after paying a claim. Many leases require this protection in favor of the landlord.
If the lease requires a waiver of subrogation, the COI should show that the requirement is met, and the tenant may need an endorsement from the insurance company.
Primary and Non-Contributory Wording
A landlord may require the tenant’s policy to be primary and non-contributory. This generally means the tenant’s insurance should respond first for covered claims involving the tenant’s operations, without seeking contribution from the landlord’s insurance.
If this wording is required, it should be stated in the lease and supported by the appropriate policy language or endorsement.
Description of Operations
The description of operations box should identify the leased location and agreement. It may include the property address, unit number, landlord name, lease name, and additional insured wording if applicable.
This section is helpful for matching the COI to the lease, but it does not replace the policy, endorsements, or lease requirements.
Cancellation Notice
Many leases ask for advance notice if the tenant’s insurance is canceled, not renewed, or materially changed. The exact notice requirement should be written into the lease.
However, landlords should understand that the insurance company’s actual notice obligations depend on the policy and applicable law. A COI should not be the only system used to track renewal dates.
Special Tenant Operations
Not every tenant has the same risk. A small office tenant is different from a restaurant, daycare, contractor, salon, manufacturer, medical clinic, or warehouse tenant.
Depending on the business, the lease may need special requirements such as liquor liability, professional liability, cyber liability, pollution liability, garage liability, equipment breakdown, or builder’s risk.
Deductibles and Self-Insured Retentions
The lease may limit how large a deductible or self-insured retention can be. A high deductible may leave the tenant responsible for a large part of a claim before insurance responds.
For higher-risk tenants, the landlord may want to confirm that the tenant can financially handle that amount.
Insurance Carrier Requirements
The lease can require coverage from insurance companies that are licensed or authorized to do business in the state and meet acceptable financial strength standards.
This helps the landlord avoid relying on weak or unsuitable insurance carriers.
Renewal Certificates
The tenant should provide updated COIs at every policy renewal. The lease should state when updated proof is due, such as before the prior policy expires.
Property managers should keep a system for tracking expiration dates. Waiting until after expiration can create gaps in compliance.
Lease Enforcement
The lease should explain what happens if the tenant does not provide the required COI. This may include default notices, delayed possession, suspension of work, or the landlord’s right to obtain insurance and charge the tenant.
The goal is not to create problems for the tenant. The goal is to make sure the insurance requirements are clear before there is a claim.
Common Mistakes to Avoid
A landlord should not accept a COI just because one has been provided. The certificate should be reviewed against the lease requirements.
Common mistakes include missing additional insured status, incorrect landlord name, expired policy dates, low limits, missing umbrella coverage, no waiver of subrogation, no workers’ compensation, or a property address that does not match the leased premises.
What Should a Tenant COI Include Before Move-In?
Before giving possession of the space, the landlord should ask for a current COI that matches the lease requirements. This should include the tenant’s legal name, correct location, required liability limits, additional insured wording, certificate holder information, and any required endorsements.
For higher-risk tenants, it may also be smart to request copies of the actual endorsements, not just the certificate.
What Should a Tenant Ask Their Insurance Agent?
A tenant should send the lease insurance section to their insurance agent before signing the lease if possible. This helps the agent confirm whether the tenant’s current policies meet the requirements or whether changes are needed.
It is much easier to resolve insurance wording before the lease begins than to rush for corrections the day before opening.
Why Do Tenant COI Requirements Matter?
Tenant COI requirements help protect the landlord, the tenant, the building, and the business relationship. When the lease clearly explains the insurance requirements, everyone has a better understanding of who is responsible for what.
Insurance requirements can vary by lease, property type, tenant operations, and state law. Landlords and tenants should review lease language with qualified legal and insurance professionals.
At StarNet Insurance Group, we help businesses, property owners, and managers understand tenant insurance requirements, commercial property coverage, liability insurance, and certificates of insurance, , please contact us with your questions.
