CLP Risk Management & Insurance Flashcards
6 cards from real CLP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CLP Risk Management & Insurance flashcards as text
What type of insurance is most commonly required of commercial tenants under a lease agreement?
Answer: Commercial General Liability (CGL) insurance
Commercial General Liability insurance protects against bodily injury and property damage claims arising from a tenant's business operations on the leased premises.
What does an 'additional insured' requirement in a commercial lease mean?
Answer: The landlord is added to the tenant's insurance policy to receive protection from related claims
An additional insured endorsement extends the tenant's liability policy to cover the landlord, protecting them from claims arising out of the tenant's operations.
What does a 'waiver of subrogation' clause in a commercial lease insurance provision accomplish?
Answer: The insurance company waives its right to sue the other party after paying a covered claim
A waiver of subrogation prevents the insurer from pursuing legal action against the other party after compensating the insured for a covered loss.
What is 'business interruption insurance' in the context of commercial leasing?
Answer: Coverage replacing lost income when a covered disaster prevents a business from operating
Business interruption insurance compensates tenants for lost revenue and ongoing expenses when a covered event—like a fire—forces a temporary business closure.
What financial risk does 'environmental liability' coverage address in commercial leasing?
Answer: Contamination cleanup costs and legal liability from hazardous materials on the property
Environmental liability insurance covers pollution cleanup costs, third-party bodily injury claims, and property damage liability from hazardous materials discovered on a leased property.
In a triple-net (NNN) lease, which party is typically responsible for carrying property insurance on the building?
Answer: The tenant, as they bear most operating expenses under a NNN lease
In a triple-net lease, tenants pay property taxes, insurance, and maintenance, so building insurance responsibility typically falls on the tenant.