Signing a commercial lease is a major commitment. Before you put pen to paper, there’s one conversation you shouldn’t skip — the one with your insurance agent. The right coverage can protect your business from costly surprises, but only if you understand exactly what you’re getting into. Here are six essential questions to ask before you sign.
1. What Type of Insurance Does the Landlord Require?
Most commercial leases specify minimum insurance requirements. Your agent can review the lease language and confirm whether your current policy — or a new one — meets those standards. Common requirements include general liability coverage and, in some cases, property insurance. Don’t assume your existing coverage is enough without checking.
2. Who Is Responsible for Insuring the Building vs. the Contents?
This is a critical distinction. Typically, the landlord insures the building itself, while you’re responsible for covering your business personal property, equipment, and inventory. But lease terms vary. Ask your agent to help you identify any gray areas so nothing falls through the cracks.
3. Do I Need to Add the Landlord as an Additional Insured?
Many landlords require tenants to list them as an additional insured on their liability policy. This means the landlord gets certain protections under your policy. Your agent can add this endorsement and explain what it means for your coverage and liability exposure.
4. What Happens If the Space Becomes Unusable?
Natural disasters, fires, or other covered events can make your commercial space temporarily inaccessible. Business interruption insurance can help cover lost income and ongoing expenses during that period. Ask your agent whether your policy includes this protection and what triggers coverage.
5. Am I Covered for Tenant Improvements?
If you’re planning to renovate or customize the leased space, those improvements may not be automatically covered. Tenant improvement coverage — sometimes called “betterments and improvements” — protects upgrades you make to a space you don’t own. This is easy to overlook but important to address upfront.
6. Are There Any Coverage Gaps Specific to This Location?
Location matters more than many business owners realize. A space in a flood-prone area, a high-crime neighborhood, or a building with aging infrastructure may come with unique risks. Your agent can help you assess location-specific exposures and recommend any additional policies — like flood insurance or umbrella coverage — that standard policies might not address.
Don’t Skip This Conversation
A commercial lease is a long-term financial obligation. The insurance decisions you make before signing can either protect your investment or leave you exposed when you least expect it. Your insurance agent isn’t just there to sell you a policy — they’re a resource you should lean on during major business decisions like this one.
Bring your lease to the conversation. Ask the hard questions. And make sure you walk away with coverage that actually fits the space, the risks, and the business you’re building.
