Is it highly unusual for a building owner to require in the lease with a tenant that occupies part a building to obtain property insurance for the entire building?
I see this requirement frequently with commercial property and I also see triple net lease programs frequently. Some times I wonder why the tenant doesn't buy his own building.
The building owner should not be shifting his property risk onto the leasee for anything other than the leased space, when dealing with property coverage. However, they usually require All Risk Contents Coverage, at replacement costs, to ensure the tenant is fully protected from any type of loss.
:unsure: Actuall this is a common practice in the E&S market. The owner basically shifts the insurance costs to the tenant. A major problem in doing this, is what happens if the tenant lets the insurance lapse and the owner has not been notified. Then a loss occurs, yeks!
