Insurance Coverage for Damage to Tenant Improvements: The Critical Interplay Between Lease Language and Insurance Policy Terms
Commercial Leasing Law & StrategyAugust 2, 2011
Zelle Hofmann attorney Dan Millea co-authored an article titled "Insurance Coverage for Damage to Tenant Improvements: The Critical Interplay Between Lease Language and Insurance Policy Terms," published in the August 2011 issue of ALM's Commercial Leasing Law & Strategy.
Multiple factors are often involved in the analysis and determination of ownership interests and insurance obligations for tenant improvements and betterments, furniture, fixtures and equipment, and other “personal property” within leased premises. In the event of a loss—be it property damage or total destruction—landlords, tenants and their respective property insurers must consider both the tenant’s and the landlord’s obligations under any lease in effect at the time of a loss, and the coverage provided by the landlord’s insurance policy and tenant’s insurance policy. In the event of conflicting or unclear language in these contracts—which is not an unusual scenario—there is often a dispute as to which party is economically responsible for damaged or destroyed property. Additionally, how the relevant lease terms and insurance policies are interpreted and applied can often vary by jurisdiction. It is therefore vital to identify the contractual duties of the landlord, the tenant(s), and the insurers to avoid losses or payments that exceed one’s actual obligations.
To read the article in full, please click here. Reprinted with permission from the August 2011 edition of Commercial Leasing Law & Strategy © 2011 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382, reprints@alm.com or visit www.almreprints.com.
