Yes - commercial landlords should require COIs from every tenant, before occupancy begins and at every policy renewal. This isn't optional risk management; it's the mechanism by which you verify that the tenant has the insurance your lease requires.
Without a current, compliant COI, you have no evidence that your tenant has insurance, and no way to verify that their coverage satisfies your lease requirements. If an incident occurs in the tenant's space and you're named in the lawsuit, "we had a lease that required insurance" is not a defense. "We verified the tenant had compliant coverage" is.
What Commercial Landlords Should Require from Tenants
Most commercial leases require tenants to maintain:
Commercial General Liability (CGL): This is the baseline. It covers third-party bodily injury and property damage arising from the tenant's operations in the leased space. A customer slips in the tenant's store; a tenant's employee damages another tenant's property; a vendor delivering to the tenant's space is injured.
Standard minimum limits for commercial tenants:
- Small retail/office: $1M per occurrence / $2M aggregate
- Larger retail/restaurant: $2M per occurrence / $4M aggregate
- Industrial/warehouse: $2M+ depending on operations
Additional insured endorsement - for the landlord and property management company: This is not just a "nice to have" - it's what gives you the right to be defended and indemnified under the tenant's policy if a third party sues you. It must be on a primary and non-contributory basis. See our detailed guide on additional insured requirements for tenants.
Waiver of subrogation: Prevents the tenant's insurer from seeking recovery from you after paying a claim. Without this, you may face subrogation claims from your tenant's insurer for incidents you may have partly contributed to.
Tenant's property insurance: The tenant should insure their own personal property, trade fixtures, and improvements. This protects them - and protects you from being asked to cover their losses under your property policy.
Workers' compensation: If the tenant has employees, workers' comp is typically required by state law. Requiring evidence of it prevents a situation where a tenant's employee sues you as the property owner for a work-related injury.
Umbrella/Excess liability: For tenants with higher risk profiles (restaurants with liquor, medical facilities, gyms, manufacturing), an umbrella policy above the CGL limits provides additional protection.
When to Collect COIs from Tenants
Before occupancy begins. This is non-negotiable. Do not allow a tenant to take possession without a compliant COI in hand. An incident on move-in day with no COI on file creates full exposure.
At every annual policy renewal. Most commercial insurance policies run on annual cycles. Collect a renewal COI when each tenant's policy renews, not just at lease inception. Use lease commencement dates and COI expiration dates to build a renewal calendar.
When the lease is amended or renewed. Insurance requirements may change. A lease renewal that increases the tenant's operations scope should trigger a review of whether existing coverage is adequate.
The Verification Gap Most Landlords Miss
Collecting a COI is not the same as verifying it. This is where many landlord COI programs fail.
A compliant COI requires:
- Current policy dates
- Coverage limits that meet the lease requirement (not just generic amounts)
- Your legal entity named as Additional Insured - with the correct legal name, on a primary and non-contributory basis
- Waiver of subrogation reflected
- Property management company also named if required by the lease
Industry data: 70% of COIs are non-compliant at first receipt. This means most COIs you receive from tenants need some correction before they satisfy your lease requirements. If you're not verifying them against the lease requirements, you're missing most of the compliance gaps.
Landlord COI Review Checklist:
- Policy dates cover today and the next 30+ days
- CGL limits meet lease minimum (per occurrence AND aggregate)
- Landlord's legal entity named as Additional Insured
- Property management entity named as Additional Insured
- Lender named as Additional Insured if required by loan documents
- Additional insured basis is "primary and non-contributory"
- Waiver of subrogation is reflected
- Tenant's property insurance is present if required
- Workers' comp is present if tenant has employees
- Umbrella/excess is present if required by lease
What Happens If a Tenant Doesn't Have Compliant Insurance
Under most commercial leases, failure to maintain required insurance is a material breach. Your rights typically include:
- Written notice of the breach with a demand to cure (typically 5-30 days depending on lease language)
- Right to obtain insurance on the tenant's behalf and bill the premium to the tenant (if lease permits)
- Right to terminate the lease for uncured material breach
Document all of this. Written notice, tenant response, resolution - all of it belongs in the tenant's file.
Special Situations
Multi-tenant properties: Each tenant is a separate entity with separate coverage obligations. A compliant COI from Tenant A provides no protection for claims arising from Tenant B's operations. Track COIs individually.
Mixed-use properties: Different lease forms (retail vs office vs residential) may have different insurance exhibits. Verify each tenant against their specific lease.
Month-to-month or short-term tenants: Insurance requirements don't disappear with shorter lease terms. If anything, shorter terms make verification more urgent since there's less time to discover and remediate gaps.
Related Resources
- Does My Tenant Need to Name Me as Additional Insured
- Difference Between Insured and Additional Insured
- How Do I Know If a COI Is Valid
- How Often Should You Collect COIs from Vendors
Bramble reads your leases and verifies that every tenant COI satisfies your specific lease requirements - so you know exactly which tenants are compliant and which need to correct their coverage. Book a demo at getbramble.com.