Commercial Property Owner as Additional Insured

For the tenant's liability policy, a commercial property owner should usually require the tenant to name the owner as an additional insured. In commercial leasing, that is a standard risk-transfer method, and insurers commonly use a landlord-specific CGL (CG 20 11) endorsement for "managers or lessors of premises."

This endorsement is a "scheduled" endorsement, meaning that the endorsement requires the insurer to specifically list the designated premises and the name of person(s) or organization(s) as the additional insured on the schedule of the endorsement. Accordingly, unlike the so-called "automatic additional insured endorsements," which afford additional insured status only if "you have agreed in writing in a contract or agreement" to include a person or organization as an additional insured, the coverage is afforded to the person or organization by listing them in the schedule. No underlying contract is necessary for this endorsement to apply.

That a lease "must be in writing in order to comply with the Statute of Frauds"⁹ is not pertinent to the determination of a landlord-tenant relationship. Stated differently, whether the lease is enforceable by law is not pertinent to a determination as to whether the premises are leased to the named insured—the facts and circumstances of the arrangement control.

This is true even if a lease has expired. The exclusion found in this endorsement for "any 'occurrence' which takes place after you cease to be a tenant in that premises" applies when the insured is no longer a tenant, not when the lease period ends. Thus, if a tenant is occupying the premises as a holdover tenant, despite the cessation of the lease period, the exclusion should not apply, and a landlord will still be entitled to coverage.¹⁰

Why it matters: additional insured status can help protect the owner when a claim arises out of the tenant's use of the leased premises or the tenant's operations. That is much stronger than just being listed on a certificate. ACORD's certificate guidance says a COI is informational only and does not change coverage; the actual endorsement is what creates additional insured protection.

The important nuance is that this is usually a liability requirement, not a catch-all requirement on every tenant policy. For the tenant's CGL, naming the owner as an additional insured is often appropriate. For property coverage, the structure is different: property interests are often handled through named insured/loss payee/building-owner type provisions, and industry guidance notes it is generally better for the owner to carry the building coverage on the owner's own policy rather than rely on the tenant's property policy unless the lease specifically shifts that obligation.

In practice, the owner should usually require:

• additional insured status on the tenant's commercial general liability policy,
• wording that fits the lease and tenant's actual operations,
• primary and noncontributory wording when the lease calls for the tenant's insurance to respond first,
• and the actual endorsement, not just a COI.

Just as important, the owner should still carry their own landlord/LRO or building coverage. Additional insured status on the tenant's policy is a layer of protection, not a substitute for the owner's own insurance program.