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Tenant certificates of insurance: what landlords are actually holding
Most landlord insurance files hold a certificate naming the wrong party, for the wrong entity, evidencing the wrong coverage. What to collect instead.
A tenant certificate of insurance is issued by a tenant’s insurer or broker evidencing that the tenant carries the coverage its lease requires. Landlords collect them at commencement and annually after that, and what the certificate establishes is narrower than most files assume: it evidences that a policy existed on the day it was issued, and it gives the landlord no rights under that policy.
Certificate holder is not additional insured
A certificate names the landlord as certificate holder, which means only that the certificate was sent to that party. Legal commentary on insurance certificates in lease transactions puts the consequence directly: "the issuance of the certificate does not itself entitle the certificate holder to any rights under the insurance policy." Additional insured status extends liability coverage on the same terms as the named insured, and only a written endorsement creates it.
The named entity is often the wrong one
Additional insured status is granted by name. A property is commonly owned by a single-purpose entity, managed by a management company, and financed by a lender with its own insurance covenants. The lease names the ownership entity as landlord, but the tenant’s broker often issues the certificate to the manager or a prior owner. The fix is unglamorous: the required additional insureds, spelled exactly as the lease and loan documents require, belong in the lease record as a data field.
You may be holding the wrong form entirely
ACORD 25 is the Certificate of Liability Insurance, the form most commonly used in leases; property coverage is evidenced on ACORD 27 or ACORD 28. A lease requiring the tenant to insure improvements and personal property is not evidenced by an ACORD 25 at all, so a file holding only liability certificates has no evidence of tenant property coverage anywhere in it.
What the lease required, and what the file holds
| Lease requirement | What the certificate typically shows | What to obtain |
|---|---|---|
| Landlord as additional insured | Landlord as certificate holder, or a checkbox | The additional insured endorsement, naming the correct entity |
| Waiver of subrogation | A checkbox or typed statement | The policy endorsement waiving it |
| Tenant property and improvements coverage | Nothing; ACORD 25 evidences liability only | ACORD 27 or 28, per the property type |
| Coverage in force today | An expiration date, contingent on premiums | Nothing on the certificate. Confirm with the carrier |
A holdover tenant with a certificate on file may have no coverage behind it if that coverage was written to the lease term, which is a reason to treat holdover as an insurance review trigger and not only a rent one. See our lease administration platform for owners.
Frequently asked questions
What is the difference between a certificate holder and an additional insured?
- The certificate holder is the party the certificate was issued to, carrying no rights under the policy. An additional insured has been added to the policy by endorsement and receives liability coverage on the same terms as the named insured.
What happens if a tenant does not deliver a certificate of insurance?
- Delivery is normally a tenant covenant, so non-delivery is typically a default with whatever cure period the lease provides. Some leases allow the landlord to obtain the coverage and bill the tenant.
Which ACORD form should a landlord require?
- It depends on the coverage. ACORD 25 evidences liability, while property coverage is evidenced on ACORD 27 or ACORD 28. A lease requiring both kinds of coverage needs evidence of both.
Does a tenant’s insurance still apply during holdover?
- Not necessarily. Where coverage is written to the lease term, it can end when the term does, even though the tenant remains in occupation, which is a reason to treat holdover as an insurance trigger.
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