Arizona Guide

Arizona Landlord Lease Insurance Requirements

The insurance section of your lease decides who pays when something goes wrong. Here is what Arizona landlords usually ask bars and restaurants to carry, and how to meet it before you sign.

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  • 11 Minute Read
  • Updated October 2026
  • A.R.S. 20-443.03
Commercial Lease Agreement Section 12: Insurance
  • General liability, $1M per occurrenceTypical minimum
  • Landlord named as additional insuredBy endorsement
  • Waiver of subrogationBoth directions
  • Liquor liability, if you serve alcoholOnce you open
Tenant Landlord

Quick Answer

Your lease sets the insurance your landlord requires. Most commercial leases ask for general liability with the landlord added as an additional insured, property coverage for your contents and improvements, and a waiver of subrogation. If you serve alcohol, expect a liquor liability requirement too. For Arizona contracts entered on or after September 12, 2026, state law also limits what a certificate of insurance can say, so the endorsements on your policy matter more than ever.

In This Guide

  1. Why the lease matters
  2. What landlords ask for
  3. Additional insured
  4. Liquor liability
  5. Property and improvements
  6. Waiver of subrogation
  7. Arizona's certificate law
  8. Indemnity
  9. Other Arizona rules
  10. Before you sign

Why your lease controls your insurance

A commercial lease is a contract, and its insurance section is where you and your landlord decide who carries which risk. Landlords often send a standard form with general liability, workers' compensation, and property requirements already filled in. Those terms were written to protect the landlord, not you.

  • Liability

    Who pays for injuries

    Guest injuries, liquor claims, and damage to others' property on your premises.

  • Property

    Who rebuilds

    The building, your build-out, and your equipment after a fire, burst pipe, or storm.

  • Contract

    Who defends whom

    Indemnity, additional insured status, and waivers that shift claims between you.

Send the insurance section to your agent before you sign. A requirement your policy cannot meet is much easier to change in a draft than after you open.

What Arizona landlords usually require

Every lease is different, but most insurance sections ask for the same core coverages. These are the ones to expect:

  • General liability

    $1 million per occurrence and $2 million aggregate is a common lease minimum, covering injuries and property damage on your premises.

  • Umbrella or excess

    Extra liability limits above your general liability, liquor, and auto policies, when the lease asks for more.

  • Liquor liability

    For bars and restaurants that serve alcohol. A standard general liability form excludes it for businesses that sell or serve alcohol.

  • Property

    Your contents, equipment, and the improvements you own, usually at replacement cost.

  • Business income

    Lost income and extra expenses while you are closed after a covered loss.

  • Workers' compensation

    Required by Arizona law for any employer that regularly hires workers, and often restated in the lease.

Terms that usually come with them

  • Additional insured status for the landlord and its property manager
  • Primary and noncontributory wording, so your policy responds before the landlord's
  • A waiver of subrogation between you and the landlord
  • Proof of coverage delivered by the deadline the lease sets

Arizona's workers' comp rules are covered in our Arizona workers' comp guide.

Additional insured status

Being named an additional insured gives your landlord coverage under your liability policy for claims tied to your space. It can only be added by an endorsement to your policy.

The standard form: CG 20 11

The ISO endorsement Additional Insured, Managers or Lessors of Premises, lists the landlord and the premises by name. It applies to the premises leased to you, and it does not cover an occurrence after you stop being a tenant there.

Scheduled vs. blanket

A scheduled endorsement names the landlord. A blanket endorsement covers anyone you agreed in writing to add, so the lease wording matters.

Additional insured vs. loss payee

An additional insured gets liability protection. A loss payee gets paid on property claims. They are not interchangeable.

Name the form

Leases can reference a specific form “or its functional equivalent” to avoid arguments about how broad the coverage must be.

Check every policy

Leases often ask for additional insured status on your general liability, auto, and umbrella policies, not just one.

Liquor liability and your landlord

If you serve alcohol, your landlord will likely want liquor liability on the list. It is the coverage most often handled wrong in a lease.

What to know

  • The standard general liability form excludes liquor claims if you are in the business of selling or serving alcohol.
  • Liquor liability is often its own coverage part, with its own limits and conditions.
  • A blanket additional insured endorsement may not reach a separate liquor coverage part unless it lists it.
  • ISO introduced a liquor-specific landlord endorsement, CG 34 01, in 2019, and some carriers do not use it yet.

What to negotiate

  • Start the requirement when you open and begin serving, not when you take possession for a long build-out.
  • Check with your carrier before agreeing to name the landlord on a liquor policy. Some will not.
  • Read the indemnity. Liquor coverage parts do not include contractual liability, so an indemnity promise may not be insured.

See how liquor claims work in Arizona in our Arizona dram shop guide, and how liquor liability insurance fits your program.

Property and your build-out

Typically, each side insures what it owns at replacement cost. The landlord insures the building, and you insure your contents, equipment, and the improvements you own. The trouble starts when the lease does not say who owns the build-out.

Bars, kitchens, and finishes are often the most expensive part of your space.

  1. 1

    Who owns it

    Your improvements, or the landlord's once installed.

  2. 2

    Who replaces it

    The party responsible for rebuilding after a loss.

  3. 3

    Whose policy pays

    The insurance that covers it, at what value.

Spell out rent abatement too. If the lease does not say rent stops while the space is unusable, an abatement the landlord grants can be treated as voluntary, and its rent loss coverage may not pay it. Ask about property and business income coverage sized to your build-out.

Waiver of subrogation

Subrogation lets an insurer that pays a claim step into its insured's shoes and sue whoever caused the loss. A waiver of subrogation stops your landlord's insurer from coming after you for a loss it already covered, and stops yours from going after the landlord.

Two ways a waiver works

An insurer can waive subrogation directly, but only by endorsement, because the insurer is not a party to your lease. More often, the waiver of claims in the lease does the work: once you and the landlord give up claims against each other, neither insurer has a right left to pursue.

  • Make the waiver mutual, so it protects you as much as the landlord.
  • Confirm your policies allow it. Most do, but some older forms still need an endorsement.
  • Some states limit waivers of subrogation, so have your attorney review the clause.

Arizona's new certificate of insurance law

Arizona changed the rules for certificates of insurance in 2026. A.R.S. 20-443.03 applies to certificates for Arizona property and casualty risks, for contracts entered on or after September 12, 2026.

  • Not a policy

    A certificate does not amend, extend, or alter your coverage, and gives no rights beyond the policy.

  • No compliance claims

    No one may issue, request, or require a certificate that says your policy meets the lease.

  • Notice comes from the policy

    A landlord gets notice of cancellation or changes only if your policy or an endorsement gives it.

  • Void if it breaks the rules

    A certificate requested or issued in violation is void. Penalties reach $1,000 per violation.

Your landlord should review your endorsements, not just a one-page certificate.

What this means for you: if your lease requires additional insured status, a waiver of subrogation, or notice of cancellation, that coverage has to be written into your policy by endorsement. Ask your agent for copies of those endorsements to share with your landlord.

Have a lease on your desk?

Send us the insurance section. We will tell you what your current policy meets and what it does not.

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Indemnity and contractual liability

Most leases include an indemnity clause, where you agree to defend and pay for claims against the landlord that arise from your use of the space. Your general liability policy can cover liability you assume in a lease, but only for bodily injury and property damage.

Read it with your agent and your attorney

  • Some jurisdictions limit how far an indemnity can be enforced, so the clause may not mean what it says.
  • Liquor coverage parts do not include contractual liability coverage.
  • If the indemnity is broader than your insurance, the gap is yours to pay.

Other Arizona rules that touch your lease

A few Arizona statutes connect your lease to the rest of your business:

A.R.S. 4-205.02

Your license needs your lease

A restaurant license applicant must submit proof of tenancy or the landlord's permission for every area in the licensed premises, including patios.

A.R.S. 33-362

Your landlord's lien

An Arizona landlord has a lien for unpaid rent on your property placed on or used on the leased premises.

A.R.S. 23-902

Workers' comp is required

Any Arizona employer that regularly hires workers must carry workers' compensation, whatever the lease says.

Read the details in our Arizona liquor license and DLLC guide.

Before you sign: a checklist

Use this checklist before you sign or renew:

  1. Send the insurance section to your agent
  2. Match every limit to your current policies
  3. Confirm which endorsements are required
  4. Time liquor coverage to your opening
  5. Settle who owns and insures the build-out
  6. Make the waiver of subrogation mutual

Then review these coverages together:

Explore coverage built for your type of business:

Find coverage in your market:

Sources

This guide is general information about Arizona law as of October 2026. It is not legal advice. Talk with an Arizona attorney about your specific situation, and with your agent about your coverage.

FAQ

Arizona lease insurance questions, answered

Straight answers to what Arizona bar and restaurant owners ask us most about meeting their landlord's insurance requirements.

What insurance does a landlord require for a restaurant lease?
Most leases require general liability, often $1 million per occurrence and $2 million aggregate, with the landlord as additional insured. Expect property, business income, workers' compensation, and liquor liability if you serve alcohol.
How do I add my landlord as an additional insured?
Your insurer adds them by endorsement, often ISO form CG 20 11 for managers or lessors of premises. A certificate alone does not do it.
Does my landlord need to be on my liquor liability policy?
Many leases ask for it. Liquor coverage is often a separate coverage part, so check that the endorsement reaches it. Some carriers will not add a landlord to a liquor policy.
What is a waiver of subrogation in a lease?
It stops one party's insurer from suing the other party after paying a claim. Ask for a mutual waiver so it protects you too.
What changed with Arizona certificates of insurance in 2026?
For contracts entered on or after September 12, 2026, a certificate cannot change your coverage or claim it meets the lease. Notice rights come only from the policy or its endorsements.
Who insures the improvements in my space?
Whoever owns them, if the lease is clear. Get the lease to say who owns the build-out, who rebuilds it, and whose policy pays.
When does liquor liability need to start under my lease?
Negotiate for it to start when you open and begin serving alcohol, rather than when you take possession for construction.
Does my lease replace Arizona's workers' comp requirement?
No. Arizona requires workers' compensation for any employer that regularly hires workers, whether or not the lease mentions it.

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