Oftentimes, people who are leasing a piece of commercial property – or residential property for that matter – are not well-informed regarding the Georgia laws that pertain to real estate.
These people may sign a lease without reading it, assuming that it is a standard lease form and requires no additional action. While this is a very bad practice for the lessee, it’s a practice that can also come back to bite the landlord as well.
As an Atlanta business litigation attorney, I am constantly reminding many of my clients regarding the need to purchase the proper insurance policies for their properties.
WHAT IS CGL INSURANCE?
Commercial general liability (CGL) is a type of insurance policy that provides coverage to a business for bodily injury, personal injury, and property damage caused by the business’ operations, products, or injury that occurs on the business’ premises.
In a recent case that my law firm handled, one of my clients, a commercial landlord, became the defendant in a personal injury lawsuit when an individual was injured in a building that the client leased to a tenant.
My client owned a commercial building in the greater Atlanta area. The building was leased to a cheerleading academy. In the lease, there was a requirement for the renter to obtain commercial general liability coverage for the business.
WHAT IF A TENANT IGNORES AN INSURANCE REQUIREMENT IN A LEASE?
However, the cheerleading academy only obtained insurance coverage for the building structure, and that insurance did not cover persons on the property. As cheerleading can be a dangerous activity, a young lady inevitably injured herself on the property.
The young woman’s parents hired an attorney and sued not only the academy, but also my client, the building and property owner.
Even though the landlord had required the cheerleading academy to obtain the proper insurance coverage, the landlord then failed to verify that the insurance had in fact been acquired by the cheerleading academy.
Now, because the owners of the cheerleading academy misunderstood the lease – or else they simply failed to obtain the necessary coverage – the academy was unprotected by an insurance policy at the time of the accident, and so was my client, the building and property owner.
MAKE SURE THAT A TENANT UNDERSTANDS YOUR LEASE AGREEMENT
As an Atlanta business attorney with clients in Alpharetta, Cumming, and all over northern Georgia, I cannot emphasize strongly enough the importance of verifying that a tenant has acquired the proper insurance coverage as specified by the lease agreement.
To merely state in the lease or contract that the tenant or client must obtain insurance is not usually enough to absolve the property owner of liability – as was the case in the example cited here.
Make sure that your tenants understand what is required of them by the lease. Make sure they understand what type of insurance they need to purchase, and then ensure that they obtain it by asking for a copy of the policy.
That is your right, and it’s an easy way to avoid a great deal of potential legal aggravation – before it happens.
If you need legal help regarding any commercial real estate matter, do not wait. Make the call now. An Atlanta business attorney can answer any of your legal questions regarding leases and commercial real estate in Georgia.