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

Commercial General Liability insurance protects against bodily injury and property damage claims arising from a tenant's business operations on the leased premises.

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

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.

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

A waiver of subrogation prevents the insurer from pursuing legal action against the other party after compensating the insured for a covered loss.

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

Business interruption insurance compensates tenants for lost revenue and ongoing expenses when a covered event—like a fire—forces a temporary business closure.

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

Environmental liability insurance covers pollution cleanup costs, third-party bodily injury claims, and property damage liability from hazardous materials discovered on a leased property.

(CLP) Certified Leasing Professional Practice Test

(CLP) Certified Leasing Professional Practice Test

CLP CLP Risk Management & Insurance