Landlord and tenant—insurances
Produced in partnership with Gowling WLG
Landlord and tenant—insurances

The following Construction guidance note Produced in partnership with Gowling WLG provides comprehensive and up to date legal information covering:

  • Landlord and tenant—insurances
  • Required insurance
  • Buildings insurance
  • If there is no cover under the landlord’s buildings insurance policy
  • If there is cover under the landlord’s buildings insurance policy
  • Hints and tips

A tenant may be given rights under an agreement for lease to enter a property prior to completion in order to carry out fit out works. This is important for the tenant so that they can commence trading as soon as possible after moving into the property.

When fit out works are to be completed in an existing building by a tenant, the tenant as employer under the building contract ordinarily selects Insurance Option C of the Joint Contracts Tribunal (JCT) Design and Build Contract or Standard Building Contract 2011 or 2016 editions ('Option C'). Also see Practice Note:Refurbishment and fit out—insurances.

Required insurance

Option C provides that up until practical completion of the fit out works:

  1. the tenant, as employer, must take out and maintain composite all risk insurance in joint names with the contractor to cover the new works (see Practice Notes: Contractors’ All Risks (CAR) Insurance and Joint insurance in construction projects), and

  2. the tenant, as employer, must take out and maintain composite insurance in respect of the existing structures, and their contents, in joint names with the contractor

The tenant will be able to procure all risks insurance in respect of the new works in the joints names of the tenant, his contractor and any sub-contractors. However, the tenant will not be able to procure stand alone