What type of insurance is typically required in leasehold properties?

In leasehold properties, building insurance for the structure and common areas is essential because it provides coverage for the physical structure itself and any communal facilities that are shared among tenants. This type of insurance is typically arranged by the landlord or management company and is necessary to protect against risks such as damage from fire, flooding, storms, and other significant perils. It ensures that both the integrity of the building and the amenities that all residents use are safeguarded, minimizing the financial loss that could occur from unforeseen damages.

Other types of insurance, such as fire insurance specifically for individual units, or specialized coverage like jewelry insurance and vehicle insurance, are not generally required as a condition of leasing a property and do not cover the broader needs of the leasehold arrangement. Building insurance is thus a primary component in maintaining the security and stability of the leasehold environment for all tenants.