Waivers Of Subrogation In Leases – The Latest Chapter

In a typical commercial lease each of the landlord and tenant will have various insurance obligations. The lease will also have various provisions that allocate risk between the landlord and the tenant, with the allocation often consistent with the insurance obligations.

One common regime in respect of insurance and risk is to provide a mutual release whereby each of the landlord and tenant release the other in respect of damages and losses that are covered by the insurance required to be obtained by the releasing party. For example, a tenant will typically be obligated to insure its personal property in the premises and the landlord will therefore be released from any damage to that property, even if caused by the landlord. Similarly, the landlord will typically be obligated to insure the building itself (with the ability to charge the cost as an operating cost) and therefore the tenant will be released from any damage to the building even if caused by the tenant.