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📄 '''Lease''' in the insurance industry refers to a contractual arrangement under which one party grants another the right to use property, equipment, or other assets for a specified period in exchange for periodic payments — and it creates a distinct set of insurable interests and coverage obligations that insurers, [[Definition:Policyholder | policyholders]], and [[Definition:Insurance broker | brokers]] must carefully address. Whether the asset is a commercial building, a fleet of vehicles, or specialized machinery, the lease allocates financial responsibilities that determine who must purchase [[Definition:Insurance policy | insurance]], what perils must be covered, and how [[Definition:Claims | claims]] proceeds are distributed.

🔧 Most lease agreements include explicit insurance provisions that require one or both parties to maintain certain coverages. A commercial [[Definition:Property insurance | property]] lease, for example, typically obligates the tenant to carry [[Definition:General liability insurance | general liability]] and sometimes [[Definition:Property insurance | property]] coverage for tenant improvements, while the landlord insures the building shell. In equipment and vehicle [[Definition:Leasing | leasing]], the lessee is usually required to name the lessor as an [[Definition:Additional insured | additional insured]] or [[Definition:Loss payee | loss payee]], ensuring the asset owner's financial interest is protected if a [[Definition:Covered loss | loss]] occurs. Insurers underwriting these risks must review the underlying lease to confirm that policy terms align with contractual obligations — gaps between the two are a common source of [[Definition:Errors and omissions (E&O) | E&O]] exposure for [[Definition:Insurance agent | agents]] and [[Definition:Insurance broker | brokers]].

💡 From an insurer's perspective, leases matter because they define who bears financial exposure and how that exposure should be priced. A tenant with a triple-net lease assumes more risk than one in a gross lease, affecting the [[Definition:Underwriting | underwriting]] assessment of both tenant and landlord policies. [[Definition:Leasehold interest | Leasehold interest]] coverage, [[Definition:Business interruption insurance | business interruption]] extensions tied to lease obligations, and [[Definition:Loss of rents insurance | loss of rents]] endorsements all stem from the economic realities embedded in lease contracts. Ignoring these nuances can leave significant coverage gaps that surface only at the worst possible moment — when a claim is filed.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Lease agreement]]
* [[Definition:Leasehold interest]]
* [[Definition:Additional insured]]
* [[Definition:Loss payee]]
* [[Definition:Property insurance]]
* [[Definition:Leasing]]
{{Div col end}}

Definition:Lease - Revision history

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