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You need insurance. That should be a no brainer. In a society that loves to sue for alleged monetary damages, one lawsuit can sink your company whether you did anything wrong or not. Liability insurance will save you and your business.

If you pull out to your commercial lease, we can guarantee you there is a section requiring you to maintain liability insurance. You landlord probably demanded that you add him, her, or the company that owns the property as an additional insured. However, does your lease require your landlord to maintain insurance on the building for things that go wrong that aren’t your fault?

Factual Scenario

Does this story sound plausible? As a gym owner, you find a location for your gym, negotiate the lease with the landlord, sign the lease, and move into the location.  You were diligent and read the lease before signing, and you know there is a section requiring your to maintain a renter’s insurance policy. So, while you are looking for insurance for your business from a company like Affiliate Guard, you ask about adding a renters policy. You don’t think anything of it, get your policy, and go to work.  

Six months in, you are growing your business and starting to make money.  However, then it happens, your building catches on fire.  Thankfully, part of your insurance policy allows you to make a claim to cover some, or all, of your equipment.  But, what about the building? 

Does Your Landlord Have Insurance?

Doing the right thing, you reach out to your landlord.  You explain the problem and ask for a timeline for the rebuild so you can get back to business.  The landlord blows you offer for 2-3 months.  You keep pushing and then the truth comes out . . . The building was not insured. 

You start thumbing through your lease and see that the lease only requires you to maintain insurance.  It doesn’t say anything about your landlord maintaining insurance.  You never thought of this at the time.  Now what?  

Unfortunately, you are out of luck.  You have no building in which to run your business, and that building is never going to be rebuilt.  It is time to throw in the towel or start looking for a new building.  

How To Avoid This Issue

This situation is completely preventable.  Before you sign your commercial lease, force the landlord to add a section requiring him/her to insure the building.  It can be awkward to demand this.  However, you have consumer power when it comes to negotiating a lease.  The landlord wants to rent the property to make money.  Further, if you demand a section about maintaining insurance, and the landlord refuses, that’s a good indicator that you should move on.  

Instances like this, and many others, are completely preventable if the right action is taken in the beginning.  That is when you need to reach out to attorneys, like those at Gym Lawyer PLLC, who know your business and what to look for.  Some preventative measures now can protect the business you are about the grow in the long run. 

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