Bean & Bloom: Lease-Required Lessor Status and a Dark Stairwell
Delgado owns a two-story retail building and leases the ground floor to Bean & Bloom, a coffee shop, under a five-year lease. The lease requires Bean & Bloom to name Delgado as an additional insured "with respect to liability arising out of the use of the leased premises" and to furnish a certificate before opening. Bean & Bloom's CGL carries a CG 20 11 endorsement naming Delgado, a $1 million occurrence limit, and no other special endorsements. A customer steps on a curled entrance mat placed by Bean & Bloom's staff, falls down the exterior stairwell that serves both the coffee shop and the upstairs offices, and fractures a hip. The stairwell light had been out for three weeks, and Delgado had two written notices from the upstairs tenant. The customer sues both Delgado and Bean & Bloom; Delgado tenders to Bean & Bloom's carrier.
1. Is Delgado an additional insured for both theories of liability - the mat and the lighting?
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Partly. The grant is real but geographically bounded, and the two theories sit on opposite sides of the boundary.
- The grant. CG 20 11 makes the lessor an insured "with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to you." Notably, it contains no "caused by" limitation, so unlike a CG 20 10 it can reach the additional insured's own negligence - which is why it is the right form for a landlord.
- The mat. Placed by Bean & Bloom's staff at the entrance to the leased ground floor. Liability for that hazard arises out of Bean & Bloom's use of the leased premises. Inside the grant; the carrier should defend Delgado on that theory.
- The lighting. The stairwell serves the upstairs offices as well as the shop, and Delgado, not the tenant, was responsible for it. That is a common-area condition outside "that part of the premises leased to you." Expect a denial on this theory.
- The structural-alterations exclusion. CG 20 11 also excludes injury arising out of structural alterations or new construction performed by or for the additional insured - not a factor here, but confirm no renovation occurred.
Tender anyway: the carrier owes a defense if any theory is potentially covered, which pulls the whole suit into the defense obligation.
2. What does the certificate actually accomplish, and what is Delgado's remedy if the coverage does not match the lease?
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The certificate proves nothing and the lease binds only the tenant.
- The certificate. It is an informational snapshot of policies in force on the date issued. Its disclaimer states it confers no rights on the holder and does not amend the policy. Delgado's status is defined by CG 20 11 and its schedule, not by the certificate's checkbox.
- The lease. It creates a contractual obligation running from Bean & Bloom to Delgado. If the purchased coverage is narrower than the lease requires, Delgado's remedy is a breach-of-contract claim against Bean & Bloom - and, practically, an argument that Bean & Bloom must fund the gap - not a claim against the carrier.
- What to verify now. Pull the endorsement itself: form number, edition date, the scheduled premises description, and whether "that part of the premises leased to you" is defined by address or by suite. Confirm no other-insurance or primary-and-non-contributory endorsement was promised in the lease, because none is attached.
- Going forward. Amend the lease to specify ISO form numbers for any additional insured, primary and non-contributory, and waiver of subrogation, and require specimen endorsement pages at each renewal.
Delgado's realistic split here: defended on the mat theory, on its own for the stairwell lighting.