Tenant Liability Insurance Requirements
Commercial landlords typically require tenants to carry a minimum of $1 million per occurrence and $2 million aggregate in Commercial General Liability (CGL) coverage. These limits protect both parties from financial risk associated with third-party injuries (like slip-and-falls) or accidental damage to the property.
Standard Liability Requirements
Most lease agreements specify these standard minimums for basic office or retail tenants:
| Coverage | Typical minimum limits | Key purpose |
|---|---|---|
| Commercial General Liability (CGL) | $1,000,000 per occurrence / $2,000,000 general aggregate | Addresses third-party injuries (such as slip-and-falls) and accidental damage tied to the tenant's operations. |
| Tenant Legal Liability (damage to rented premises) | $500,000 to $1,000,000 | Covers damage the tenant causes directly to the leased unit (for example, a kitchen fire), which standard CGL often excludes. |
| Automobile liability | $1,000,000 combined single limit (CSL) | Required when the tenant uses vehicles for business purposes. |
| Workers' Compensation | Statutory limits (as required by state law) | Ensures employee injuries are handled outside of general liability. |
| Umbrella or excess liability | As specified in the lease (over primary policies) | Provides additional limits above the primary liability policies. |
Adjustments for High-Risk Tenants
For tenants with higher risk profiles, such as restaurants, fitness centers, or auto repair shops, landlords often require higher limits through an Umbrella or Excess Liability policy:
- Moderate Risk: $2,000,000 to $5,000,000 in excess limits.
- High Risk/Large Scale: Limits can reach $10,000,000 to $20,000,000 for complex or high-exposure deals.