Our solicitors deliver expert lease insurance obligations advice for landlords and tenants

Under a standard FRI lease, the landlord typically insures the building and recovers the premium from the tenant through the service charge or as a separately identified insurance rent. The tenant is usually responsible for insuring its own contents, trade fixtures, and plate glass. However, the precise allocation depends on the wording of the lease. Our reviewing commercial lease agreements solicitors can analyse your specific lease to confirm exactly who bears each insurance obligation.

Most commercial leases include a rent suspension (or rent cesser) clause that suspends the obligation to pay rent, or a fair proportion of it, where the premises are damaged or destroyed by an insured risk and cannot be used. The scope of the suspension varies between leases, and some exclude rent suspension where the damage was caused by the tenant. Our rent and service charge advice solicitors can assess whether your lease entitles you to a rent suspension and advise on enforcement if the landlord disputes it.

Yes, tenants can challenge insurance premiums that are excessive or unreasonable. The lease typically requires the landlord to insure at a competitive market rate, and the landlord's insurance costs must be reasonably incurred. Our service charge negotiations solicitors regularly assist tenants in challenging excessive insurance costs, often by obtaining comparative quotes and negotiating directly with the landlord. Where agreement cannot be reached, our commercial lease disputes team can pursue the matter formally.

Failure to comply with insurance obligations is a breach of covenant and can have serious consequences. For serious breaches, a landlord may be entitled to forfeit the lease. Our forfeiture and possession solicitors advise on the grounds for forfeiture and the procedural requirements. In less serious cases, the landlord may have a claim for damages if the breach caused loss. Our commercial tenant advice service helps tenants understand and avoid breaches, while our lease risk assessment helps landlords identify exposure early.

A well-drafted commercial lease should include clear provisions identifying the insuring party, the risks to be covered, the required level of cover (full reinstatement value), the insurer's minimum rating, the obligation to produce evidence of insurance, provisions for applying insurance proceeds to reinstatement, and rent suspension provisions. Our landlord-friendly lease drafting solicitors ensure these provisions are thorough and enforceable. We also recommend lease legal audits for existing portfolios to identify weak insurance provisions that need strengthening through lease variation agreements.

Absolutely. Our lease insurance obligations advice solicitors regularly handle disputes between landlords and tenants concerning insurance matters. Common disputes include arguments over whether damage falls within insured risks, whether the landlord has properly applied insurance proceeds to reinstatement, whether rent suspension should apply, and whether insurance premiums charged to the tenant are reasonable. We pursue resolution through negotiation, lease mediation and settlement, and if necessary, formal proceedings. Our commercial lease disputes team has extensive experience in insurance-related litigation.