Tenant's Failure to Carry Required Insurance Is Grounds to Evict

What Happened: A convenience store tenant signed a lease requiring it to carry certain insurance at its sole cost and expense during the lease term, including at least $1 million in general liability insurance, worker’s compensation insurance required by law, and plate glass insurance. The tenant also agreed that it would obtain the liability insurance from a reputable and independent insurer rated at least “A” by Best’s Insurance Guide. The tenant kept none of these promises, and the landlord sued to evict.

Ruling: The New York court awarded the landlord summary judgment.

Reasoning: It was pretty much an open-and-shut case. According to the court, it’s “well settled” that a commercial tenant’s “failure to maintain insurance as required by the parties’ lease is an incurable defect and a material breach of the lease.” And, as even the tenant acknowledged, it didn’t live up to its insurance duties under the lease:

• It allowed its liability insurance to lapse for a full year;
• The liability insurance coverage it did obtain was for less than $1 million and came from a provider rated below “A”; and
• It never obtained the required additional workers’ comp or plate glass insurance.

Nor did the tenant raise any valid defenses. Its argument that it was the landlord’s responsibility to cure insurance defects and then charge the tenant for any necessary additional fees was nothing more than a conclusion of law without supporting facts, the court concluded. 

• 191 Chelsea LLC v. Sal’s Convenience Corp., 2024 N.Y. Misc. LEXIS 1635, 2024 NY Slip Op 50377(U)