Landlords often ask a deceptively simple question:
“Why don’t I just require the tenant to name me as an additional insured on their policy?”
In commercial leasing, that question usually has a clear and sensible answer.
In residential leasing, it’s far more complicated — and sometimes legally risky.
This article attempts to explain what additional insured status actually does, how Courts interpret it, and why its usefulness depends heavily on whether the tenancy is commercial or residential.
What Does “Additional Named Insured” Really Mean?
Being named as an additional insured means the Landlord is included as an insured person under the tenant’s liability policy, but only:
- To the extent stated in the endorsement, and
- Only for liability arising out of the Tenant’s use, operations, or occupancy.
It does not automatically provide:
- Property insurance for the Landlord
- Coverage for the Landlord’s own independent negligence
- Coverage beyond the policy limits purchased by the Tenant
Courts interpret additional insured endorsements narrowly and textually, not generously.
Commercial Tenancies
Why it works commercially:
In commercial leasing, additional insured clauses are:
- Common
- Expected
- Routinely enforced
Why? Because commercial parties are presumed to:
- Have relatively equal bargaining power
- Allocate risk knowingly through contract and insurance
- Understand that insurance is part of the deal economics
A properly drafted commercial lease typically requires:
- The Landlord to be named as an additional insured
- Coverage to be primary and non-contributory
- Contractual liability coverage
- Proof by endorsement, not merely a certificate
What Courts actually enforce
Ontario Courts do not prohibit Landlords from being additional insureds in commercial leases. They do, however, consistently hold that:
- Coverage only applies if the claim arises from the Tenant’s operations
- The Landlord is not insured for its own negligence
- Vague lease language does not expand policy wording
In short:
Additional insured ≠ (does not equal) blanket protection, even commercially.
Residential Tenancies
Residential Landlords often seek additional insured status because they want:
- Fewer claims against their own insurer
- Protection from Tenant-caused losses
- A simple “one policy covers all” solution
The problem is that Ontario residential law is not built that way.
The RTA problem
Under the Residential Tenancies Act, 2006 (RTA):
- The Landlord is responsible for the building
- The Tenant is responsible for contents and personal liability
- Clauses that shift or dilute the Landlord’s statutory duties are suspect
Requiring a Tenant to name the Landlord as an additional insured can look like:
The Tenant is insuring the Landlord’s risk.
That framing is what creates enforceability issues.
Practical and legal obstacles
Even before enforceability is tested:
- Most Tenant insurance policies are not designed to add Landlords as additional insureds
- Insurers frequently refuse or severely limit such endorsements
- Coverage, if granted, is often so narrow as to be meaningless
- Landlords rely on certificates, which provide no rights
As a result, many “additional insured” clauses in residential leases provide illusory protection.
Is There a Case Saying Residential Landlords “Can’t” Be Additional Insureds?
No Ontario Court or LTB decision has issued a blanket prohibition stating that Landlords can never be “additional insureds” under a Tenant’s policy.
However:
- There is also no authority endorsing the practice in residential tenancies
- The RTA’s consumer-protection framework makes such clauses vulnerable
- The absence of clear approval is itself telling
In contrast, Courts have repeatedly approved waivers of subrogation and other insurance-based risk allocation tools that do not involve tenants insuring landlords.
Comparing Commercial and Residential Tenancies
| Issue | Commercial Tenancy | Residential Tenancy |
| Bargaining power | Relatively equal | Statutorily imbalanced |
| Additional insured clauses | Common, enforceable | Rare, vulnerable |
| Policy availability | Routine | Often unavailable |
| Coverage scope | Limited but understood | Often illusory |
| RTA concerns | None | Significant |
What Additional Insured Status Does Not Replace
In both contexts, additional insured status does not replace:
- The landlord’s own property insurance
- The landlord’s liability insurance
- Proper maintenance and statutory compliance
- Waivers of subrogation where appropriate
It is a risk-transfer supplement, not a substitute.
Commercial leases
✔ Additional insured clauses are standard
✔ Courts enforce them according to policy language
✔ They work — but only within defined limits
Residential leases (Ontario)
⚠ Legally untested and practically weak
⚠ Often unavailable or unenforceable
⚠ Frequently misunderstood by landlords
For residential landlords, waivers of subrogation and proper landlord insurance remain far safer tools.
Brian Madigan LL.B., Broker
www.OntarioRealEstateSource.com