Allocating Risk in Real Estate Leases: Contractual Indemnities, Additional Insured Endorsements, Subrogation Waivers

Coordinating Lease Provisions With Insurance Coverage to Mitigate Landlord and Tenant Liability Risks

Recording of a 90-minute premium CLE video webinar with Q&A


Conducted on Thursday, May 13, 2021

Recorded event now available

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Course Materials

This CLE course will provide real estate counsel with a review of how parties in leasing transactions can allocate risk to protect their respective economic interests. The panel will address indemnification provisions, including those for actions arising from a party's negligence, additional insured (AI) endorsements, and waivers of subrogation for the parties to protect themselves from economic loss.

Description

Indemnification agreements are widely used to shift risk in a variety of real estate transactions. Real estate leasing counsel must understand the impact of indemnification lease provisions--who is ultimately responsible for the claim, and when and how is this responsibility shared? The indemnitor must negotiate contractual clauses that limit the scope of the indemnification.

The party seeking indemnification must negotiate provisions that address negligence, AI status, and defense of claims. Understanding the relationship between contractual indemnification, insurance requirements, and different AI endorsements are critical to effectively allocating risk. The prior ISO AI endorsement revisions are crucial when drafting risk transfer language.

One of the more complex risk mitigation issues is the interplay, under both property and liability policies, between the insurer's right of subrogation and the parties' attempts to waive subrogation. By way of mutual waivers, each party agrees to obtain from its insurer a waiver of the insurer's right of subrogation against the other party. Counsel must understand and critically analyze subrogation issues in lease negotiations.

Listen as our authoritative panel of real estate attorneys discusses contractual indemnification in real estate leases and how to reconcile indemnity language with insurance coverage, AI endorsements, and waivers of subrogation. The panel will offer best practices for mitigating and allocating risk in real estate leasing transactions.

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Outline

  1. Indemnification lease provisions
    1. Fault-based vs. "no-fault"
    2. Unilateral vs. mutual
    3. Interplay with insurance
    4. Statutory considerations
  2. Additional insured coverage
    1. Additional insured vs. additional named insured
    2. Endorsements vs. certificate of insurance
    3. Policy language and various additional insured forms
    4. Scope of coverage
  3. The interplay between contractual indemnity and additional insured coverage
    1. Contractual indemnification
    2. Contractual insurance requirements
    3. Additional insured coverage
    4. Crafting contractual indemnification provisions
  4. Subrogation
    1. Overview of subrogation principles
    2. Mutual waivers of subrogation
    3. Limited waivers of subrogation

Benefits

The panel will review these and other relevant issues:

  • How can counsel draft indemnification lease provisions that protect their clients--whether the indemnitor, landlord, or tenant?
  • How can counsel ensure that contractually required AI coverage is satisfied by the named insured's policy?
  • How have the prior ISO's revisions to AI endorsements narrowed the scope of coverage for AIs?
  • How can counsel draft subrogation waivers that protect both landlords and tenants?

Faculty

Molotsky, Brad
Brad A. Molotsky

Partner
Duane Morris

Mr. Molotsky’s primary practice is focused in the areas of commercial leasing, acquisitions and divestitures,...  |  Read More

Weltman, Jeremy
Jeremy Y. Weltman

Shareholder
Ruberto Israel & Weiner

Mr. Weltman's wide-reaching litigation practice focuses on finding successful resolutions to his clients' legal...  |  Read More

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