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Related Articles: Commercial Landlord

The Lease Indemnity Clause

THE PURPOSE: Typically a Lease will state that Tenant will indemnify and hold the Landlord harmless from any claims of damages, suits, fines, liabilities, losses, costs and expenses or injury by the Tenant, Tenant's employees and third parties. Often the indemnity clause states that it even applies to Landlord's own negligence.

CASE LAW: In Appalachian Power Co. v. Sanders an indemnity provision was upheld which required the Tenant to indemnify the Landlord, even though the injured party fell on the premises into a hole from an old water meter. However, in the case of Hiett v. Lake Barcroft Community Ass'n an indemnity agreement signed by a triathalon participant, absolving negligence of the event's sponsor, was set aside on the basis of public policy.

INSURANCE: The Lease should require the Tenant to include in its insurance policies, provisions that: (1) protect the Landlord from subrogation or other claims that are covered by fire, casualty or other types of coverage; and, (2) prevent the invalidation of insurance coverage if the Tenant has waived its right to recover from the Landlord.

ADVICE: The Lease should include hold harmless, indemnification, and defense provisions relating to mechanic's liens, property damage, business losses, personal injuries, theft, safety, and environmental laws. Landlord's agents, employees, invitees and independent contractors should be covered by these provisions. The Lease should protect the Landlord from its own negligence, from construction injuries, and from damages caused by mechanical systems.