Your Landlord Wants a COI: What Restaurant Leases Require
- 6 days ago
- 7 min read
Your restaurant landlord just asked for a COI, and now you are wondering what exactly they want and whether your current insurance is enough.
A certificate of insurance is common in commercial leases, but the details matter, especially when your lease requires additional insured status, specific limits, or other policy conditions.
Why Does a Restaurant Landlord Want a COI?
A Certificate of Insurance (COI) is a document that summarizes your business insurance coverage. It shows important details such as the policies you carry, coverage dates, limits, and the insurance company providing the coverage.
For a restaurant landlord, the COI is mainly proof that you have the insurance required by the lease.
The lease may require you to provide a COI before you open, before taking possession of the space, or whenever your policy renews. Some landlords also require updated certificates when coverage changes.
A COI is not the same thing as an insurance policy. It summarizes coverage but generally does not change the terms of the underlying policy. If your lease requires your landlord to be an additional insured, for example, the appropriate endorsement may be needed. Simply listing the landlord as a certificate holder does not automatically provide additional insured status. (Seyfarth Shaw - Homepage)
That distinction is important because a certificate can look perfectly acceptable while failing to satisfy the actual insurance requirements in the lease.
What Does a Restaurant Lease Usually Require?
Every commercial lease is different, so there is no universal restaurant insurance checklist that applies to every property.
However, restaurant leases commonly address several types of coverage.
Commercial general liability insurance helps protect your business against certain third-party claims involving bodily injury, property damage, and personal or advertising injury.
For example, a customer could slip inside your restaurant and claim that your business was responsible. The landlord may also face a claim because the accident happened on leased premises.
Your lease may specify minimum liability limits. The exact limits vary by landlord, property, lease, and business circumstances.
Additional Insured Status
Your landlord may require you to add the property owner or property management company as an additional insured on your liability policy.
An additional insured is a party that receives certain liability protection under your policy, subject to the endorsement's terms and limitations.
This is different from being a certificate holder. A certificate holder generally receives the certificate as evidence of insurance, but that designation alone does not create additional insured coverage.
If the lease specifically requires additional insured status, your insurance agent should review the wording and arrange the appropriate endorsement if available.
Your lease may also require property coverage for items you own or improvements you make to the restaurant.
This can include:
Kitchen equipment
Refrigeration equipment
Furniture
Fixtures
Inventory
Signage
Tenant improvements
Other business property
The landlord's building insurance generally does not mean your restaurant's equipment and contents are automatically insured.
If you have employees, your lease may require evidence of workers' compensation coverage in addition to any requirements imposed by state law.
Workers' compensation generally provides benefits for covered employee work-related injuries and illnesses, subject to applicable laws and policy terms.
Requirements vary by state, so restaurant owners should review both their lease and state requirements.
Liquor Liability
If your restaurant sells or serves alcohol, your lease may require liquor liability insurance, which is designed to address certain claims connected with the sale or service of alcoholic beverages.
Whether this coverage is required, and what limits apply, depends on your lease, operations, state law, and insurance program.
Umbrella or Excess Liability
Some landlords require an umbrella or excess liability policy when they want liability limits above the underlying policies.
An umbrella or excess policy can provide additional liability limits, subject to its terms and conditions. It is not automatically required for every restaurant.
What Does a COI Need to Show?
The landlord may provide specific instructions about what should appear on your certificate.
Common items include:
Your legal business name
The insured location
Policy numbers or identifying information
Policy effective and expiration dates
Types of insurance
Required liability limits
The landlord's legal name
Certificate holder information
Required endorsements
Special wording requested by the lease
Your landlord may also request copies of endorsements rather than relying only on the COI.
This matters because a certificate generally summarizes coverage. It does not replace the policy or an endorsement when the lease requires a specific change to the insurance arrangement.
Does a COI Automatically Add the Landlord to Your Policy?
No. A COI by itself generally does not make your landlord an additional insured. If the lease requires additional insured status, the appropriate endorsement should be issued according to the policy and lease requirements.
This is one of the most common points of confusion when dealing with restaurant lease insurance requirements.
Imagine your landlord says, "Please send us a COI naming us as an additional insured."
You send a certificate showing the landlord's name in the certificate holder section.
That may not satisfy the lease.
The certificate holder and additional insured are not interchangeable. The additional insured status must come from the policy or an applicable endorsement, not simply from putting a name on the certificate.
Other Insurance Requirements You May See in a Lease
Restaurant leases can contain more than a basic COI requirement.
Waiver of Subrogation
A waiver of subrogation is a policy provision that can limit an insurer's ability to seek recovery from another party after paying a covered claim.
Some leases require this provision in favor of the landlord.
Whether it applies to your policy and how it works depends on the policy language and applicable endorsement.
Primary and Noncontributory Coverage
A lease may require your insurance to be primary and noncontributory.
In plain English, this generally means the tenant's required insurance is intended to respond before other available insurance and without seeking contribution from the additional insured's insurance, subject to the policy wording and applicable endorsement.
Simply writing those words on a COI does not necessarily create the required coverage. The underlying policy and endorsements matter. (American Bar Association)
Notice of Cancellation
Some leases contain requirements about notifying the landlord if insurance is canceled, nonrenewed, or materially changed.
Do not assume that every cancellation notice statement appearing on a certificate creates a contractual right that does not exist in the policy.
Your agent can review the lease language and determine what your insurance program can provide.
How to Handle a Restaurant Landlord COI Request
When your landlord asks for a certificate, avoid treating it as a simple paperwork task.
Use this process instead:
1. Read the insurance section of your lease.
Find the section describing required insurance. Look for coverage types, limits, additional insured requirements, waivers, notice provisions, and renewal requirements.
2. Send the requirements to your insurance agent.
Give your agent the actual lease language rather than summarizing it from memory.
3. Confirm the landlord's exact legal name.
A property owner, management company, and property holding company may have different legal names. Your agent needs the correct information.
4. Check the insured location.
Make sure the restaurant's address matches the location covered by your policy.
5. Review required endorsements.
If the lease requires additional insured status, waiver of subrogation, or primary and noncontributory wording, ask your agent to verify the applicable endorsements.
6. Send the completed documentation to the landlord.
Keep a copy of the COI and endorsements for your records.
7. Repeat the process at renewal.
Many leases require updated evidence of insurance when policies renew.
What If Your Insurance Does Not Meet the Lease?
Do not wait until opening day to discover that your policy does not meet the landlord's requirements.
If your current insurance does not satisfy the lease, your agent can review what needs to change. Depending on the situation, that could involve adjusting limits, adding an endorsement, adding a required coverage, or addressing a coverage requirement that your current policy does not provide.
The landlord may also have requirements that are broader than what your business actually needs from an insurance standpoint.
That is why the lease and insurance policy should be reviewed together.
A licensed insurance agent can help you understand the insurance requirements and identify potential gaps. For legal questions about the lease itself, consult a qualified attorney.
FAQ
What is a COI for a restaurant?
A COI, or Certificate of Insurance, summarizes your business insurance coverage. A landlord may request it as proof that you maintain the insurance required under your restaurant lease.
Does a COI make my landlord an additional insured?
Not by itself. A certificate holder is not automatically an additional insured. If the lease requires additional insured status, the appropriate policy endorsement generally needs to be issued.
What insurance does a restaurant landlord usually require?
Requirements vary, but a lease may address general liability, commercial property, workers' compensation, liquor liability, umbrella or excess liability, and specific endorsements. The lease controls what the landlord requires.
Can my landlord require specific insurance limits?
A commercial lease can contain contractual insurance requirements, including specified limits. Your insurance agent should review those requirements with you to determine whether your current coverage satisfies them.
When should I request a restaurant COI?
Request it as early as possible, especially before signing a lease, taking possession of the space, opening the restaurant, or beginning renovations. Give your agent the complete insurance requirements so there is time to address any issues.
How Wexford Insurance Can Help
At Wexford Insurance, we understand that restaurant owners have plenty to manage without spending their afternoon translating lease language into insurance terms.
When a landlord requests a COI, the goal is not simply to produce a piece of paper. Your insurance should be reviewed against the actual lease requirements so you can identify potential issues before they become a problem.
Wexford can help review your insurance needs, coordinate certificates and applicable endorsements, and explain what your coverage is designed to do.
Because restaurant operations vary, your insurance needs may be different from those of another restaurant down the street. A licensed insurance professional can help you evaluate your specific situation, state requirements, lease terms, and business operations.
If your landlord has asked for a COI, Wexford Insurance can help you review the requirements and determine what documentation your restaurant needs. Request a free quote from Wexford Insurance and get practical guidance on building an insurance program that fits your business and lease requirements.
