Playbook · Commercial Property
Tenant Lease Indemnification
When a commercial tenant's cooking, build-out or neglect damages the building, the landlord's property carrier pays and the lease sits in someone's inbox unread. Indemnity, insurance and waiver clauses decide whether the tenant, its contractor or its liability carrier owes the loss. Ishqkala reads the lease alongside the claim notes and flags the clauses that create or bar recovery.
Average missed recovery
$28,500
Typical adverse parties
- Commercial tenant
- Tenant's CGL carrier (contractual liability or additional insured)
- Tenant's contractor during build-out
- Landlord, when the tenant's property carrier is the insured
Red-flag phrases
What the adjuster note says when there is a recovery.
- fire started in tenant's kitchen hood
- tenant doing build-out, contractor on site
- tenant shut off heat in vacant suite
- forklift hit sprinkler head
- lease requires tenant to name LL as AI
- space heater under desk in suite 210
- roof leak reported to LL 3 times
Loss scenarios
Who pays, and why.
Restaurant grease duct fire
Restaurant tenant
Hood and duct cleaning lapses allow grease buildup. NFPA 96 cleaning records and the lease maintenance clause support the claim.
Freeze-up in a dark suite
Tenant
A tenant shuts off heat to a vacated space against lease terms, and pipes freeze and burst.
Warehouse sprinkler discharge
Tenant
A tenant's forklift operator strikes a sprinkler head in the racking aisle and floods finishes and the neighboring suite.
Landlord's failure to repair
Landlord
Where the insured is the tenant's property carrier, repeated unaddressed roof leak reports support recovery against the landlord.
Legal theories
The law behind the recovery.
- Contractual indemnity
- Lease indemnity clauses shift loss from tenant negligence or operations. Scope language and state law on indemnity for the indemnitee's own negligence decide reach.
- Breach of lease covenants
- Maintenance, heat, alteration and compliance-with-law covenants create contract claims with a longer SOL.
- Waiver of subrogation
- ISO form CP 00 90 allows insureds to waive recovery rights in writing before a loss. Mutual lease waivers are generally enforced to their written scope.
- Implied co-insured rule
- Under the Sutton rule, from Sutton v. Jondahl (Okla. Civ. App. 1975), some courts treat tenants as co-insureds absent a contrary lease, mainly in residential cases. States split.
Evidence checklist
Preserve before you pursue.
- Full lease with amendments and exhibits
- Tenant certificates of insurance and AI endorsements
- Tenant's CGL policy
- Hood and duct cleaning records
- Tenant improvement contract
- Fire department report
- Utility usage and heat records
- Maintenance request history
- Photos and repair estimates
Recovery workflow
Step by step.
01
Pull the lease at FNOL
Ishqkala flags tenant involvement and requests the lease and amendments.
02
Read the clauses
Identify indemnity, insurance, waiver and repair clauses and note the governing state.
03
Tender
Tender to the tenant and its CGL carrier under contractual liability and additional insured terms, and ask for the policy, not only the certificate.
04
Document fault
Collect fire department, hood cleaning, maintenance and contractor records, and tie each to the lease covenant it breached.
05
Demand and track
Track tort and written contract SOLs separately and send the demand.
FAQ
Tenant Lease Indemnification FAQ
Usually to its written scope. Check whether it reaches the tenant's contractors, the deductible and uninsured losses, and whether it was signed before the loss, before closing the file.
In most commercial settings, yes, unless the lease waives it. States split on the implied co-insured rule, and courts look closely at lease language that tells the tenant to insure the building or not.
Ishqkala extracts and flags the indemnity, insurance, waiver and repair clauses, with page references. Counsel decides what they mean for the claim.
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