What are the insurance requirements in gross and net leases?
Under a gross lease, the owner is required to carry property insurance for fire and other perils, and increases in insurance costs are passed on to the tenant. The tenant is required to carry business liability insurance which lists the owner as an additional insured. . Under a net lease, the tenant is required to carry both the property and business liability insurance. Any requirements with regard to the insurance carrier should be included in the lease. The tenant will be required to provide proof of insurance to the owner. The tenant should also have personal property insurance to cover fixtures and inventory.
