A Certificate of Insurance is an important document—but it may not provide the protection a landlord expects under an AIR CRE lease. What matters and what should lessors request?
30-Second Summary
A Certificate of Insurance confirms that a policy exists, but it doesn’t necessarily establish that a landlord has been added as an additional insured. Under the AIR CRE lease, requesting the Additional Insured Endorsement helps verify that the landlord has received the protection contemplated by the lease.
When a commercial lease requires a tenant to carry liability insurance, many landlords and brokers assume the job is done once the tenant provides a Certificate of Insurance (COI).
Not necessarily.
Under the AIR CRE lease, one of the most important protections for a landlord isn’t the certificate itself—it’s the Additional Insured Endorsement behind it.
Understanding the difference can help landlords, tenants, brokers, and property managers avoid unnecessary risk and ensure the lease’s insurance provisions function as intended.
Want to hear the full breakdown?
Watch our complete 30-minute deep-dive below.
AIR CRE Insurance Requirements: A Complete 4-Point Guide.
What Is a Certificate of Insurance?
A Certificate of Insurance is a summary document that provides basic information about an insurance policy. It typically identifies:
- The insured party
- The insurance carrier
- Types of coverage
- Policy limits
- Effective dates
Because it’s concise and easy to review, Certificates of Insurance are commonly exchanged during commercial leasing transactions.
However, it’s important to understand what a certificate does—and just as importantly, what it doesn’t do.
Why a Certificate of Insurance May Not Be Enough
One of the key points discussed in our webinar is that a Certificate of Insurance is generally prepared by the insurance broker—not the insurance company itself. While the certificate may indicate that a landlord has been added as an additional insured, that statement alone may not establish the insurer’s contractual obligation to provide the coverage contemplated by the lease.
In other words, the certificate summarizes information about the policy, but it isn’t the policy itself.
That’s why relying exclusively on a Certificate of Insurance can leave important questions unanswered.
The Document That Really Matters: The Additional Insured Endorsement
The AIR CRE lease requires more than general liability insurance.
It also requires the tenant to obtain an endorsement adding the landlord as an Additional Insured.
An endorsement is an official part of the insurance policy issued by the insurance carrier. Unlike the Certificate of Insurance, it modifies the policy itself.
Why is this significant?
Because when a landlord is properly added as an additional insured, the insurer may have obligations not only to indemnify the landlord for covered claims, but also to defend the landlord if litigation arises.
That distinction can become extremely important when a third party files a lawsuit involving both the tenant and the landlord.
A Practical Example
Imagine a visitor slips and falls inside a warehouse leased by a tenant.
The injured person files a lawsuit against both the tenant and the property owner.
If the tenant satisfied the AIR CRE lease’s insurance requirements—including obtaining the proper Additional Insured Endorsement—the tenant’s general liability insurer may be obligated to defend both parties and provide coverage consistent with the policy.
Without the proper endorsement, however, the landlord may find itself relying on its own insurance or disputing whether coverage exists.
The outcome depends on the specific policy language and facts of the claim, but obtaining the required endorsement at the beginning of the lease helps reduce uncertainty before a dispute ever arises.
Why This Requirement Exists
The AIR CRE lease also requires tenants to indemnify the landlord under certain circumstances.
One helpful way to think about the insurance requirement is that it helps support that indemnity obligation.
During the webinar, this relationship was compared to a security deposit.
Just as a security deposit provides financial protection if rent isn’t paid or other obligations aren’t met, liability insurance helps provide financial protection if the tenant’s indemnity obligations are triggered by a covered claim.
While the insurance policy doesn’t replace the indemnity provision, it may provide the practical means for satisfying it.
What Lessors Should Request
As a best practice, landlords should consider requesting both:
- A Certificate of Insurance; and
- The applicable Additional Insured Endorsement referenced in the AIR CRE lease.
Reviewing both documents helps confirm that the required coverage has been obtained and that the landlord has received the protection contemplated by the lease.
If questions arise regarding the sufficiency of the endorsement or the scope of coverage, landlords should consult their insurance broker or legal counsel before accepting the documentation.
Why This Matters to Brokers
Commercial real estate brokers often coordinate insurance documentation during the leasing process.
Understanding the distinction between a Certificate of Insurance and an Additional Insured Endorsement can help brokers:
- Identify missing documentation before possession is delivered.
- Reduce delays during lease administration.
- Better advise clients on the practical purpose of the insurance provisions.
- Help prevent avoidable disputes after the lease begins.
Rather than viewing insurance documents as routine paperwork, brokers can see them as part of the broader risk-management framework built into the lease.
Pro Tip
Don’t assume a Certificate of Insurance tells the whole story.
If the AIR CRE lease requires the landlord to be named as an additional insured, request the actual Additional Insured Endorsement—not just the certificate. Verifying the required endorsement at the beginning of the lease is generally much easier than addressing questions about coverage after a claim has been made.
Disclaimer
This article is for educational and discussion purposes only and does not constitute legal or insurance advice. Every lease, insurance policy, and factual situation is different. Consult qualified legal counsel and your insurance professional regarding your specific circumstances.
Consensus Legal is not affiliated with or sponsored by AIR CRE.
