CLP CLP Risk Management & Insurance

Question 1

What type of insurance is most commonly required of commercial tenants under a lease agreement?

Accepted Answer

Commercial General Liability (CGL) insurance

Answer

Life insurance

Answer

Health insurance

Answer

Title insurance

Question 2

What does an 'additional insured' requirement in a commercial lease mean?

Accepted Answer

The landlord is added to the tenant's insurance policy to receive protection from related claims

Answer

The tenant must purchase supplemental life insurance

Answer

A secondary named tenant on the lease document

Answer

An insurance endorsement covering renovation work only

Question 3

What does a 'waiver of subrogation' clause in a commercial lease insurance provision accomplish?

Accepted Answer

The insurance company waives its right to sue the other party after paying a covered claim

Answer

The tenant waives their right to sublease

Answer

The landlord waives all insurance requirements

Answer

A mutual agreement to use arbitration for all disputes

Question 4

What is 'business interruption insurance' in the context of commercial leasing?

Accepted Answer

Coverage replacing lost income when a covered disaster prevents a business from operating

Answer

Coverage for lease termination penalties

Answer

A type of renter's insurance for personal property

Answer

Insurance against lease renewal disputes

Question 5

What financial risk does 'environmental liability' coverage address in commercial leasing?

Accepted Answer

Contamination cleanup costs and legal liability from hazardous materials on the property

Answer

Risk of tenant payment default

Answer

Normal wear and tear replacement costs

Answer

Earthquake-related structural damage to the building

Question 6

In a triple-net (NNN) lease, which party is typically responsible for carrying property insurance on the building?

Accepted Answer

The tenant, as they bear most operating expenses under a NNN lease

Answer

Always the landlord

Answer

Always the federal government

Answer

The mortgage lender