Business premises insurance: tenant and landlord obligations, and lease clauses

Business premises insurance is not required by any French law for a commercial lease, but almost every lease demands it, and it stems from a rule of the Civil Code: the tenant is presumed liable for fire and damage to the premises they occupy. The landlord insures the building, the tenant insures their tenant's liability, their contents and neighbours' claims, and both policies must match the lease's insurance clause. In coworking or flexible offices there is no lease but a service contract: the operator insures the space, and you remain liable for what you cause there and for what you leave there.

Is insuring business premises mandatory in France?

Not by law, in the general case. Unlike housing, where the Act of 6 July 1989 requires tenants to insure rental risks, the commercial lease regime (Articles L145-1 et seq. of the Commercial Code) contains no insurance obligation. Leases create it: practically all of them require the tenant to insure against fire, explosion, water damage and neighbours' claims, and to prove each year that premiums have been paid, on pain of the termination clause.

The obligation mostly comes from the Civil Code. Article 1733 establishes a presumption of liability: the tenant answers for a fire in the premises unless they prove an accident, force majeure, a construction defect or spread from a neighbouring building. A fire whose cause remains unknown does not exonerate them. Article 1732 adds that the tenant answers for damage occurring during their occupancy unless they prove it happened without their fault.

Who insures what between landlord and tenant?

The landlord insures what belongs to them: walls, roof, fixed installations, through a non-occupying owner policy or a building multi-risk policy. The tenant insures their liability towards the landlord (rental risks), their liability towards neighbours and third parties, their fit-out, equipment, stock and business interruption.

Rental risks refer to the tenant's liability towards the owner for damage caused to the leased building by a fire, an explosion or water damage originating in the premises. The "neighbours' and third parties' claims" cover deals with the damage that the same event spreads to adjoining premises or to third parties.

Since the Pinel Act of 18 June 2014 and its decree of 3 November 2014 (Articles L145-40-2 and R145-35 of the Commercial Code), a commercial lease must include a precise inventory of the charges passed on to the tenant. The building's insurance premium is one of them if it is expressly listed; major repairs under Article 606 of the Civil Code and the landlord's management fees can never be charged to the tenant, and any clause to the contrary is deemed unwritten. The inventory of charges should be checked before signing.

What does a commercial lease's insurance clause say, and how do you read it?

It contains four elements: the risks to be covered (fire, explosion, water damage, glass breakage, neighbours' claims); the minimum amount of cover, often the rebuilding value or a number of years of rent; the obligation to provide a certificate each year; and, increasingly, a mutual waiver of recourse.

You read it with your insurance policy in hand. A clause requiring you to cover the building's rebuilding value while your multi-risk policy covers rental risks only up to a flat ceiling creates a gap, and that gap is yours to bear. A clause requiring "landlord's loss of rent" cover requires a specific extension. A clause prohibiting certain storage (flammable products, lithium batteries) must be reflected in your risk declaration, otherwise the insurer may plead misrepresentation.

What is a waiver of recourse, and should you accept it?

A waiver of recourse is a clause by which one party undertakes not to claim from the other compensation for damage it may have caused. In a lease it is most often mutual: the landlord waives action against the tenant for damage to the building, the tenant waives action against the landlord for their contents and business interruption, and each turns to their own insurer.

The mechanism works, on one imperative condition. The insurer that indemnifies its client is subrogated to its rights against the liable party (Article L121-12 of the Insurance Code); a waiver of recourse removes that recourse, and the same article lets the insurer be released from its cover if subrogation can no longer operate because of the insured. A tenant who signs a waiver without declaring it to their insurer, and without obtaining an endorsement in which the insurer also waives its recourse, is therefore exposed to a refusal of cover. Case law in 2025 upholds these clauses but sets them aside in the event of gross or wilful misconduct and when the landlord has breached its duty to deliver the premises.

A well-negotiated lease does not just say who is liable: it says which insurer pays, and it says so to the insurer.

How do you insure a coworking space or flexible offices?

In coworking, serviced offices or a flexible lease, you sign a service contract, not a commercial lease. The commercial lease regime does not apply; neither does the presumption of Article 1733, because you are not a tenant within the meaning of the Civil Code. The operator insures the premises, common areas and its furniture, and says so in its terms and conditions.

Three areas remain to be covered. Your general liability, for damage your employees cause to other occupants or to the facilities. Your equipment, because the operator's insurance excludes occupants' property, and workstations in flex offices are easily stolen. Your professional liability, which does not depend on the walls. Read the service contract: some operators require a certificate with a minimum limit, others impose a waiver of recourse in their favour, which must be declared to your insurer.

What should your multi-risk policy cover for company offices?

A business multi-risk policy for offices bundles rental risks, neighbours' claims, general liability, damage to your contents, theft and vandalism, glass breakage and business interruption. Business interruption compensates the gross margin you fail to earn while the premises are unavailable and the costs incurred to keep working elsewhere; for a service company, it is often the largest item.

Three pitfalls come up again and again. Fit-out carried out by the tenant (partitions, cabling, meeting rooms) is excluded from the owner's policy and must be declared in yours at its real value. IT equipment must be insured at replacement value, otherwise the payout is calculated on a depreciated fleet. The natural disaster deductible is set by ministerial order for business property: 10% of the amount of damage, with a minimum of €1,140 (€3,050 for drought).

How much does business premises insurance cost in 2026?

For offices, the premium depends on floor area, contents value, address and cover. The 2026 rates from online brokers give the order of magnitude.

These amounts concern the tenant's policy. Above 500 m² or with significant fit-out, the premium is calculated on quotation. Our article on the levers to reduce your premium details the trade-offs between deductible, limits and prevention.

Frequently asked questions

Can the landlord force me to take out their insurance?

No. The lease may impose cover and amounts, and the landlord may pass on the building's insurance premium if the inventory of charges provides for it, but they cannot impose an insurer on you. You choose your policy freely, as long as it complies with the insurance clause.

What happens if the fire comes from a neighbouring unit?

Article 1733 exonerates you if you prove the fire spread from a neighbouring building. In a building with several tenants, Article 1734 makes all tenants liable in proportion to the rental value of their part, unless it is proven that the fire started with one of them. Hence the importance of neighbours' claims cover in both directions.

Do I need to insure the premises during fit-out works before opening?

Yes. The presumption of liability runs from the handover of the keys, not from opening day. Take out the multi-risk policy from the lease's effective date and declare the works; damage caused by your contractors falls under their own insurance, but your tenant's liability towards the landlord remains engaged.

Does a subtenant also have to take out insurance?

Yes. The main tenant remains liable towards the landlord, but the subtenant answers for their own damage and for fire in the part they occupy. The sublease must reproduce the insurance clause of the main lease and provide for the corresponding certificates.

At Lesto, we read the insurance clause of your lease or coworking contract before building your multi-risk policy: scope of rental risks, required amounts, waiver of recourse to be validated by the insurer, value of fit-out and business interruption. Signing a lease or moving offices? Discover our business multi-risk insurance and request an analysis within 72 hours.