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

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 is 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.