Insurance for Warehouses for Lease in Mexico

In Seguros HCid we have specialized in the field of damages insurances, where we can find Multiple Coverage Policies, which help us insure any business, from a small shop to a residential complex, buildings or factories and plants.

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Over time we have managed to obtain the experience of what the market usually requires and that is why today we want to talk about the requirements that we usually find in a lease of Warehouses in renowned industrial parks. The clauses are very similar in each contract that our clients have requested from us, some coverages can be obtained without problems, others are complicated to obtain, but it is always possible to find an option or solution.

“Renter’s Insurance. The Lessee undertakes to contract and maintain in force and at his expense, valid and enforceable the following insurance policies during the lease and until the lessee vacates and returns possession of the leased property to the lessor.

Civil Liability Insurance, must cover damages to third parties in their property and / or in their persons caused by the tenant and / or its operation and that occur around or from the leased property, in an amount that is not less than $ xx, xxx, xxx.- Dollars per event (amount and currency depend on the contract). The policy must include, but not limited to the following coverage operations and real estate, contractual civil liability and tenant civil liability, this must also include a clause of “Non-subrogation” against the lessor.

This policy will cover in the first instance any damage caused to the leased property when this is attributable to the lessee, the parties of the lessee or any of its suppliers, contractors or customers.

Insurers must be authorized by the National Insurance and Surety Commission (CNSF in Mexcio), and have an “A” or higher  rating by A.M. Best.

Insurance policies shall provide that the parties shall be notified in writing 30 days in advance of a request for cancellation or non-renewal and any adverse changes of significance.

In case of damage to the property, compensation shall be made to the lessor.”

Does this ring a bell? Well, you are in the right place. Next, we will talk about each of these requirements:

1. Civil Liability Insurance: This is the basic coverage required by the business to be able to comply with the lease, usually a fixed insured sum is stipulated or per square meter of the rented warehouse. You should know that this policy is also necessary to comply with civil protection and be able to get your operating license. This coverage is also called “Operations and Real Estate”.
2. Contractual Civil Liability: It is very common to find it in this type of contract, although it is a very difficult coverage to obtain. What it protects is “the set of legal obligations that arise from the signing of a contract. The parties are bound by this document, which is legally concluded and has the effect of law. Anyone who fails to perform the contract has a duty to compensate the other party.” To obtain it it is necessary to provide a copy of the lease, for this a NDA (Confidentiality Agreement) is usually signed. It requires quite a bit of time for your quote and is difficult to obtain.
3. Tenant Civil Liability: Very logical to find this coverage in the lease contracts, the intention is to cover the damages caused to the rented warehouse as a result of a fire or explosion that may be the responsibility of the person who operates in the property.
4. “Non-subrogation” clause against the landlord: It is necessary to understand what Subrogation refers to. The insured may receive compensation from the insurance company, but the insurance company has the right to receive the Subrogation of rights to go against those responsible for the loss. Putting this clause prevents the insurer from going against the landlord if he is responsible for a claim.
5. Rated “A” or higher by A.M. Best: A.M. Best is a credit rating agency and financial strength, warehouse landlords prefer that their insurance contracts be acquired in well-rated companies, is the reason for this clause.

Very well these are the basic coverages that are found in the leases of wineries, it may be that some is not in your contract, but most are very common.

You can also find in contract:

“Any other policy necessary to insure the goods, machinery, furnishings, furniture or equipment owned by the lessee that are within the leased property against damage or loss. The Lessor shall not be liable for any property of the lessee or third parties within the leased property. “

This clause requests that the lessee has its contents insured since in no case is the lessor responsible for these losses.

As you can see it is necessary to have certain protections, look for experts in the field and try to tie your coverages as best as possible, it will take away headaches when an accident happens.

If you don’t already have a trusted insurance agent or broker, we can gladly support you. Please contact us through the form below.