You're about to sign a commercial lease, and the insurance clause is the part nobody explains. In most leases, the landlord insures the building and the tenant insures its own contents, equipment and liability. But your lease decides, so the exact wording matters. Some leases pass the landlord's building insurance cost on to tenants. This guide shows who typically covers what, how lease types change the answer, and which clauses to check in Dallas-Fort Worth.
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Who Insures What in a Commercial Lease
Here's how responsibility usually splits. Your lease can change any of it.
The landlord typically insures:
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The building structure, roof, walls and permanent fixtures
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Liability for the property and common areas
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Rental income the landlord would lose after damage
The tenant typically insures:
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Inventory, equipment, furniture and supplies
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Its own business income if damage stops operations
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Liability from its own operations, including customers who visit
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Its share of the landlord's building premium, if the lease passes it through
A simple rule of thumb: if it stays behind when you move out, the landlord usually insures it. If you could pack it up and take it with you, you usually insure it. Tenant improvements are the gray area, so put who insures them in writing.
How Your Lease Type Changes Who Pays
Lease names aren't standardized, so read the wording instead of the label. These are the common structures:
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Triple net lease. The tenant pays base rent plus a share of property taxes, building insurance and common area maintenance.
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Modified gross lease. The tenant pays base rent plus some, but not all, operating expenses. Which ones is negotiated.
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Gross lease. The landlord folds operating expenses, including insurance, into the rent and absorbs changes in cost.
Single net and double net leases fall in between. On any lease that passes costs through, ask the landlord for the current insurance cost estimate and how it's divided among tenants. That number can change every year.
What Landlord Insurance Covers
Landlords typically carry commercial property insurance on the building. The Texas Department of Insurance says commercial property insurance pays to repair or replace your building and business property damaged by a fire, storm or other event the policy covers. It can also pay some lost income. A landlord's package often adds liability coverage and rental income coverage.
Two details from the Texas Department of Insurance affect landlords and tenants alike:
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Replacement cost versus actual cash value. Replacement cost pays to repair or rebuild at current prices. Actual cash value subtracts depreciation, so it might not be enough to rebuild.
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Flood is usually excluded. Most commercial property policies don't cover flood. A separate flood policy is needed, and it has a 30-day waiting period before coverage starts.
For how a landlord-focused policy works, read our guide to lessor's risk insurance in Texas. Owners can also see property owner insurance and commercial property insurance in Dallas.
What Commercial Tenants Need
Most commercial tenants carry these coverages, and many leases require them:
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General liability insurance, which helps pay when your business causes injury or property damage to others
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Business personal property coverage, for your inventory, equipment and furniture
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Business income coverage, which helps replace income if damage forces you to close
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Workers' compensation, if you choose to cover employees. The Texas Department of Insurance says private Texas employers can choose to carry it, though many landlords and clients ask for proof
A business owner's policy can combine general liability, property and business income for many smaller businesses. See our business owner's policy page and general liability insurance page. For what Texas law and contracts ask of businesses, read Texas business insurance requirements.
Damage a Tenant Causes to the Landlord's Building
A tenant's general liability policy may include limited coverage for damage to the space you rent. The limit, the causes of damage it covers and the exclusions vary by policy, and it generally doesn't cover liability you take on only by signing a lease. The Texas Department of Insurance notes that general liability policies exclude liability you assume in a contract, with some exceptions.
If your lease makes you responsible for damage to the building, ask your advisor whether an endorsement can raise that coverage. Do that before you sign, not after.
Certificates, Additional Insureds and Loss Payees
A certificate of insurance shows that coverage exists. It isn't the policy and doesn't change the policy. Texas law backs that up. The Texas Department of Insurance says a person may have a legal right to notice of cancellation or nonrenewal only if the person is named in the policy or an endorsement and the policy or Texas law requires notice. A certificate can't change the terms of that notice.
For landlords, this means a certificate alone may not protect you. Ask the tenant's insurer for the endorsements that list you as an additional insured on liability coverage and as a loss payee on property coverage, where your lease calls for it. Tenants can request certificates through us. Our guide on what a certificate of insurance is explains the basics, and existing clients can get same-day certificates.
Dallas-Fort Worth: Lease Terms Worth Checking
Local weather and building types make some clauses matter more here:
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Hail. The Insurance Information Institute reports 902 hail events in Texas in 2025, the most of any state. The National Oceanic and Atmospheric Administration's Storm Events Database lists 16 hail events in Dallas County in 2025, 28 in 2024 and 51 in 2023, including 11 in 2023 with hail two inches or larger. Check who owns the roof, who pays a wind and hail deductible, and whether the landlord can pass it through to tenants.
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Flood. The same database lists 44 flash flood events in Dallas County in 2025. Because most commercial property policies exclude flood, see who buys flood insurance, if anyone does. Our guide, do I need flood insurance in Texas, explains the options.
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Wind coverage isn't coastal. The Texas Department of Insurance says the Texas Windstorm Insurance Association serves the Texas coast and Harris County on Galveston Bay. Dallas-Fort Worth properties normally carry wind and hail in the standard property policy.
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Freeze damage. A burst pipe can shut down every tenant in a building. Check who is responsible for building systems and when business income coverage starts. See our post on winter storm commercial property claims.
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Shared buildings. Strip centers, offices and mixed-use buildings share roofs, walls and systems. Put the dividing line in writing.
If you own apartments, Dallas also inspects multi-tenant properties. See preparing for an insurance inspection of an apartment building.
Lease Insurance Clauses to Check Before You Sign
Send the insurance clause to your advisor with this list:
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Who insures the building, and whether the premium is passed through and how it's divided
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Required liability limits, and any minimum for damage to the premises
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Additional insured and loss payee requirements
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Flood, wind and hail responsibilities and deductibles
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How and when you must show proof of coverage
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What the lease says if required coverage ends
Your advisor can match your policy to the lease before the deadline.
How Thumann Agency Helps Landlords and Tenants
We've placed commercial insurance in Dallas since 1996. You get a dedicated advisor who reads the lease with you, and as an independent broker with access to more than 80 carriers, we compare options for your property or business. No one can promise a price before an insurance company quotes it. If you want to look further, our commercial property insurance guide explains the coverage in more detail.
We found Thumann when we needed a new commercial building policy. Glad we did. They have always been very helpful in finding the right coverage and carrier for our needs. I highly recommend them.
Steve Hodges | Google | ★★★★★
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Frequently Asked Questions About Commercial Building Insurance
What is a waiver of subrogation in a commercial lease?
It's a clause where one party gives up its insurer's right to recover a loss from the other party. Leases often include it to avoid lawsuits between landlord and tenant after a covered loss. It usually has to be added to the policy by endorsement, and it may affect your coverage. Ask your attorney about the clause and your advisor about the policy.
Does a landlord's policy cover a customer hurt inside my space?
Usually not. A customer's injury inside your space generally falls under your own liability coverage. The landlord's liability policy mainly responds to the building and common areas. Many leases require you to carry liability limits and name the landlord as an additional insured. Check the exact wording in your lease with your advisor.
Who insures the build-out I paid for?
The lease decides. Some leases treat improvements you pay for as the tenant's property to insure. Others treat them as part of the building, which the landlord insures once you leave. Ask for the answer in writing, then check that the policy that should cover the build-out lists it. Keep receipts for the work so its value is documented.
Can I get a certificate of insurance before I sign a lease?
You need an active policy first. Once your policy is in place, we can issue a certificate that matches your lease's requirements, and existing clients can get same-day certificates. Send the insurance clause early so any required endorsements are ready when the landlord asks. Timing depends on the insurance company and what underwriting needs.
What if my lease requires coverage I don't have yet?
Show your advisor the clause right away. Some requirements are quick to meet, such as raising a liability limit. Others take longer, such as adding an endorsement or a new policy. Ask your landlord whether proof is due at signing or before move-in, and plan around that date. If you need more time, ask the landlord in writing before the deadline passes.
Ready to Match Your Coverage to Your Lease?
Tell us whether you own or rent, what your lease says about insurance and what you carry now. We'll show you where your lease and coverage line up and where they don't. Get a Quote or Call Us at (972) 991-9100.
Last Reviewed: October 2026
Author: Lauren Thumann Director of Marketing.
Sources: Texas Department of Insurance: Commercial Property Insurance Guide, Texas Department of Insurance: Commercial General Liability Insurance, Texas Department of Insurance: Certificates of Insurance Frequently Asked Questions, Texas Department of Insurance: Workers' Compensation Coverage Verification, Insurance Information Institute: Facts and Statistics, Hail, National Oceanic and Atmospheric Administration: Storm Events Database
Disclaimer: This information is provided for general educational purposes only and is not legal, tax, or insurance advice, or a full description of any policy. Coverage terms, conditions, limits, and exclusions vary by carrier and by state, including Texas. Not all coverages or discounts are available in all states. Reviews and ratings are from verified customers and reflect their own opinions and experiences. For details about your specific needs, please contact Thumann Agency directly. Thumann Agency is licensed and operates under Texas Department of Insurance regulations. Your lease controls who must insure what, so review it with an attorney.