Signing your first office lease is a milestone moment for anyone building their business. It signals growth, stability, and a new phase for your business. But before the landlord hands over the keys, they’ll almost certainly ask for proof of insurance.

For many founders, this request comes as a surprise. You’re focused on negotiating rent, reviewing buildout allowances, or mapping out the move—not parsing through insurance requirements. But the truth is, landlords won’t finalize a commercial lease without proof that you’re properly insured.

Why Landlords Require Insurance

From a landlord’s perspective, leasing space to your business involves risk. Slip and fall claims alone cost an average of $20,000 and account for nearly 1 in 3 injuries in small businesses. Now imagine that happening in your office lobby, or an employee accidentally damaging the building, or a fire spreading to another tenant’s space. Without insurance, the landlord could end up financially exposed.

Without insurance, the landlord could end up financially exposed. That’s why leases almost always include insurance requirements. By carrying the right coverage, you’re showing the landlord that:

• You’re financially prepared to handle accidents or claims
• Their property and liability exposure are protected
• You’re operating as a responsible, trustworthy tenant

In short, insurance reduces risk for everyone and keeps the lease enforceable.

Core Coverages You’ll Need to Sign a Lease

Every lease is different, but most landlords require a few standard coverages. Let’s look at the most common ones.

1. General Liability Insurance

This is the most common, and often mandatory, coverage for commercial leases. General Liability Insurance protects against third-party claims of bodily injury, property damage, or personal injury that occur in your leased space.

For example:

• A client visiting your office trips on a rug and breaks their wrist
• An employee accidentally damages another tenant’s property
• A delivery worker claims injury while dropping off equipment

In each case, General Liability Insurance helps cover legal costs, settlements, and medical expenses. Landlords want this coverage in place to ensure claims don’t fall back on them.

2. Business Property Insurance

While general liability protects against third-party claims, Business Property Insurance protects your own assets inside the leased space. This includes office furniture, computers, inventory, and sometimes improvements you make to the space (known as “tenant improvements”). 

Leases often require tenants to carry Business Property Insurance because it reduces disputes if something happens inside your unit. If a fire damages your office, for example, you’ll rely on your policy—not the landlord’s—to replace what you’ve lost.

3. Workers’ Compensation Insurance

If you have employees, most states legally require you to carry Workers’ Compensation Insurance. This coverage pays for medical care and lost wages if an employee gets injured on the job. Even if you already have a policy in place, landlords may explicitly call it out in the lease to confirm compliance. It also reassures them that employee injuries won’t create liability for the building.

4. Commercial Auto Insurance

If your business operates vehicles—delivery vans, service cars, or shuttles—landlords may ask for proof of Commercial Auto Insurance. Even if your vehicles aren’t directly tied to the leased property, landlords may want assurance that your business’s transportation risk is covered. This requirement is less common, but it appears in certain industries (e.g., logistics, catering, construction).

5. Umbrella or Excess Liability Insurance

For larger leases—especially in high-profile buildings—landlords may ask tenants to carry Umbrella Liability Insurance. This is additional protection that sits on top of your General Liability, Auto, or Employer’s Liability Insurance. It’s essentially an extra cushion for catastrophic claims. 

For example, if your General Liability limit is $1M but a claim costs $3M, your Umbrella policy covers the difference.

Why Landlords Want To Be An Additional Insured

Many commercial leases includes an “additional insured” clause. This means your General Liability Insurance policy must extend some coverage to the landlord. In practice, this protects the landlord if they’re named in a lawsuit tied to your business activities. For example, if a visitor slips in your office and sues both you and the building owner, your insurance may also defend the landlord.

Adding a landlord as an additional insured is standard practice, but it may impact your coverage. Be sure to always review the terms with your broker to ensure you understand how it works.

The Certificate of Insurance (COI)

Even if you have the right policies in place, the landlord won’t just take your word for it. They’ll require a Certificate of Insurance (COI)—a one-page document summarizing your coverage, issued by your insurance provider.

The COI shows your business name, policy numbers, limits, effective dates, and the landlord’s name as certificate holder (and often as an “additional insured”). Most landlords require an up-to-date COI before you can take possession of the space. Without it, you may find yourself stuck waiting on the sidelines even after signing the lease.

How to Secure the Right Coverage Quickly

If you’re in lease negotiations, don’t wait until the last minute to think about insurance. The process is usually straightforward, but delays can cost you valuable time. Here’s how to move fast:

1. Review the lease carefully. Most insurance requirements are spelled out in detail. Look for coverage types, limits, and “additional insured” language.
2. Share the requirements with your broker. Send the exact lease language so your broker can match policies accordingly.
3. Request the COI early. Ask for the certificate as soon as coverage is in place. Landlords may require approval before giving you access to the space.
4. Double-check accuracy. Confirm names, dates, and limits match the lease requirements before forwarding the COI.

At Vouch, we help you get it right. Commercial leases can be dense, and insurance requirements aren’t always straightforward. We’ll help you understand what’s being asked and make sure your coverage and COIs meet the terms of your lease. For custom requests, like landlord-specific language or waivers of subrogation, our team is here to support you.

Common Pitfalls to Avoid

Commercial lease insurance is straightforward once you know the basics, but there are a few mistakes that trip up founders:

• Waiting until the last minute. Insurance providers can usually issue COIs quickly, but not instantly. Build in time to avoid move-in delays.
• Missing coverage gaps. Landlords often focus on liability insurance, but you’ll want property coverage to protect your own assets too.
• Overlooking additional insured requirements. Forgetting this step can invalidate your compliance with the lease.
• Not updating certificates. Leases usually run longer than one year, so make sure to provide updated COIs when policies renew.

By staying proactive, you avoid scrambling and keep your move-in on schedule.

Having Insurance in Place to Sign a Commercial Lease

Insurance might not be the most exciting part of signing a commercial lease, but it’s one of the most important. Landlords require it to protect themselves, and you should want it to protect your business.

The right coverage keeps risks manageable, deals moving, and your business protected as it grows into its next stage. So before you celebrate move-in day, make sure your insurance is squared away. With the right policies and the right partner, you can sign your lease, get your keys, and start building what’s next.

Frequently Asked Questions

Do I need insurance before signing my lease? ‍

Most landlords require proof of insurance, typically in the form of a Certificate of Insurance (COI), before they’ll hand over the keys. Without it, you may not be allowed to take possession of the space.

What is a Certificate of Insurance (COI), and how do I get one? ‍

A COI is a one-page document from your insurance provider summarizing your coverage. It includes policy details, effective dates, and often names the landlord as an “additional insured.” Your broker or provider (like Vouch) can generate one once your coverage is in place.

What does “additional insured” mean? ‍

It means your insurance policy extends some coverage to the landlord. If they’re named in a claim related to your business, your policy may help defend them. It’s a standard requirement in most commercial leases.

What if my lease includes unusual insurance terms? ‍

Terms like waivers of subrogation or landlord-specific wording are common in larger or more complex leases. Vouch can help you interpret the requirements and adjust your policies or documents accordingly.

What happens if I don’t keep my insurance active? ‍

Letting coverage lapse or failing to update your COI can put you in breach of the lease. It may also delay building access or trigger penalties. Stay ahead of renewal dates and keep documentation current.

Vouch Specialty Insurance Services, LLC (CA License #6004944) is a licensed insurance producer in states where it conducts business. A complete list of state licenses is available at vouch.us/legal/licenses. Insurance products are underwritten by various insurance carriers, not by Vouch. This material is for informational purposes only and does not create a binding contract or alter policy terms. Coverage availability, terms, and conditions vary by state and are subject to underwriting review and approval.