Commercial Lease Indemnity Clause Water Damage
A commercial lease indemnity clause for water damage is a contractual promise one party (often the tenant) will reimburse or defend the other for specified losses — separate from which policy pays first (Justia Norfolk; IRMI). Many commercial leases disclaim landlord liability even for landlord negligence and use mutual waivers of subrogation (Public Counsel; FirstLine; IRMI; Travelers).
Last updated: September 17, 2026
Commercial Lease Indemnity Clause Water Damage
| Claim | Listed | URL |
|---|---|---|
| Public Counsel: most commercial leases disclaim landlord liability even for landlord negligence | Most commercial leases expressly disclaim any liability on the part of the landlord for damage to the tenant or its property, even if that damage is the result of the landlord’s negligence, and they require that the tenant rely on its own insurance. | Public Counsel: landlord liability disclaimer |
| Public Counsel: bursting pipe / leaking roof surprise when landlord has no reimbursement duty | It can come as quite a surprise to some tenants when damage occurs – say from a bursting pipe or a leaking roof – and it turns out that the landlord has no responsibility for reimbursing the tenant. | Public Counsel: bursting pipe / leaking roof |
| Public Counsel: tenant negligence → landlord insurer may pursue after paying | if the tenant, through its inadvertent negligence, were to cause significant damage to the landlord’s building, the insurance company could, after paying to restore the landlord’s building, take the tenant to court and recover the amounts the insurance company had to pay. | Public Counsel: landlord insurer vs tenant |
| Public Counsel: waiver of subrogation usually mutual | This waiver is usually mutual, with the tenant making a similar waiver for damage to its property. | Public Counsel: waiver usually mutual |
| Public Counsel: indemnification allocates responsibility; do not cover other party’s gross negligence/willful misconduct | In an indemnification provision, one party agrees to be responsible for any injury, damage, or death that occurs on the property regardless of whose negligence was involved. However, one party should not agree to be responsible for another party’s gross negligence or willful misconduct. | Public Counsel: indemnification provision |
| FirstLine: lease controlling; waivers decide insurer-vs-insurer (GTA) | The lease is the controlling document. Many commercial leases assign maintenance duties, require the tenant to carry specific coverage, and include waivers of subrogation that decide whether one insurer can pursue another. | FirstLine: lease controlling + waivers (GTA) |
| FirstLine: base structure/common systems → owner; contents → tenant; negligence escape of water can be liable (GTA) | In most GTA commercial and multi-tenant buildings, the building owner is responsible for the base structure and common systems, the tenant is responsible for their own leasehold improvements and contents, and the party whose negligence caused the escape of water can be held liable for the rest. | FirstLine: base structure vs contents (GTA) |
| Progressive: burst pipes and broken sprinkler systems as internal water sources | Damage from internal sources, like burst pipes and broken sprinkler systems, is more likely to be covered than water entering from outside. | Progressive: broken sprinkler systems |
| Progressive: sudden and accidental typically covered vs gradual | Sudden and accidental water damage is typically covered, but issues that develop over time probably aren't. | Progressive: sudden and accidental |
| Progressive: GL may apply if you cause water damage to someone else’s property | Other policies, like general liability, may apply if you cause water damage that affects someone else's property. | Progressive: GL water to others |
| IRMI definition of indemnity | The concept of indemnity is based on a contractual agreement made between two parties in which one party (the indemnitor) agrees to pay for potential losses or damages caused by the other party (the indemnitee). | IRMI: indemnity definition |
| IRMI definition of hold-harmless agreement | A hold harmless agreement is a provision in a contract that requires one contracting party to respond to certain legal liabilities of the other party. | IRMI: hold-harmless definition |
| IRMI: broad form hold-harmless unenforceable in a number of states | Broad form hold harmless agreements are unenforceable in a number of states. | IRMI: broad form unenforceable |
| IRMI definition of subrogation | Subrogation is the assignment to an insurer by terms of the policy or by law, after payment of a loss, of the rights of the insured to recover the amount of the loss from one legally liable for it. | IRMI: subrogation definition |
| IRMI definition of waiver of subrogation | A waiver of subrogation is an acknowledgment by an insurer that it has no right to subrogate against a liable third party after it has paid a loss on behalf of its insured. | IRMI: waiver of subrogation definition |
| IRMI definition of insured contract | Insured contract is a defined term common in liability policies that provides limited exceptions to the contractually assumed liability exclusion by stating that the exclusion does not apply to liability assumed in an "insured contract." | IRMI: insured contract |
| Travelers: after claim payment, recovery right may transfer; subrogation pursues party at fault | To the extent of the claim payment made by Travelers, the right of recovery may transfer to us. Subrogation is the process by which we pursue the person or entity at fault for a loss. | Travelers: recovery right / subrogation |
| Travelers: someone else’s fault → hold responsible party accountable; typically after carrier payment | Sometimes a loss you suffer is someone else's fault. By way of subrogation, Travelers strives to hold the responsible party accountable to pay for the damages. Typically, a subrogation claim for property damage occurs only after a carrier issues a payment. | Travelers: after carrier payment |
| Justia Norfolk (Mass.): indemnity obligations separate and distinct from insurance provisions (MA) | An indemnity provision imposes obligations that are separate and distinct from the obligations imposed by an insurance provision. This is true even where, as Norfolk suggests, the insurance provision purports to insure the landlord for its own negligence. | Justia Norfolk: indemnity ≠ insurance (MA) |
| Justia Norfolk (Mass.): indemnify/hold-harmless ≠ agreement to buy insurance (MA) | an agreement in a lease that the tenant indemnify or hold harmless the landlord is distinct from an agreement to purchase insurance on the landlord's behalf, which covers the liability of both in the event of a negligently caused injury. | Justia Norfolk: hold-harmless ≠ buy insurance (MA) |
| Justia MD Real Prop §8-105: lease indemnity/exculpation for landlord negligence void (MD) | If the effect of any provision of a lease is to indemnify the landlord, hold the landlord harmless, or preclude or exonerate the landlord from any liability to the tenant, or to any other person, for any injury, loss, damage, or liability arising from any omission, fault, negligence, or other misconduct of the landlord on or about the leased premises or any elevators, stairways, hallways, or other appurtenances used in connection with them, and not within the exclusive control of the tenant, the provision is considered to be against public policy and void. | Justia MD §8-105 (MD) |
| Justia NY GOL §5-321: lessor negligence exculpation void/unenforceable (NY) | Every covenant, agreement or understanding in or in connection with or collateral to any lease of real property exempting the lessor from liability for damages for injuries to person or property caused by or resulting from the negligence of the lessor, his agents, servants or employees, in the operation or maintenance of the demised premises or the real property containing the demised premises shall be deemed to be void as against public policy and wholly unenforceable. | Justia NY GOL §5-321 (NY) |
| Justia Borg-Warner / OCGA §13-8-2(b): leases in anti-indemnity for sole negligence (GA) | Leases are among those contracts that are included within the ambit of the public policy prohibition established by OCGA § 13-8-2 (b). | Justia Borg-Warner / OCGA §13-8-2(b) (GA) |
| Justia University Plaza (Fla.): general any-and-all-claims ≠ sole-negligence indemnity (FL) | the general clause "indemnify ... against any and all claims" or equivalent language does not authorize indemnification for negligence committed by the indemnitee alone. | Justia University Plaza (FL) |
| Justia TX Prop. Code §92.052 landlord repair duty (RESIDENTIAL TENANCIES only) | LANDLORD'S DUTY TO REPAIR OR REMEDY | Justia TX §92.052 (residential) |
How indemnity, insurance, and subrogation fit together
IRMI defines indemnity as a contractual agreement that one party pays for potential losses caused by the other; IRMI hold-harmless treats hold-harmless as a synonym-style duty to respond to certain legal liabilities. Justia Norfolk states that indemnity obligations are separate and distinct from insurance provisions, and that indemnify/hold-harmless is distinct from an agreement to buy insurance (MA).
Public Counsel states that most commercial leases disclaim landlord liability for tenant property damage even for landlord negligence, that bursting-pipe / leaking-roof losses can surprise tenants, that indemnification allocates responsibility regardless of whose negligence was involved (without agreeing to cover the other party’s gross negligence or willful misconduct), and that waivers of subrogation are usually mutual. FirstLine states that the lease is the controlling document for maintenance duties and waivers, and that base structure / common systems typically sit with the owner while contents sit with the tenant (GTA).
Progressive lists burst pipes and broken sprinkler systems among internal water sources, lists sudden-and-accidental vs gradual coverage language, and notes general liability may apply when water damage affects someone else’s property. IRMI / IRMI waiver / Travelers / Travelers under-deductible define subrogation after a paid claim and waiver-of-subrogation. IRMI insured contract defines the limited exception to the contractually assumed liability exclusion.
State anti-indemnity / exculpation: MD §8-105, NY GOL §5-321, GA Borg-Warner / OCGA §13-8-2(b), FL University Plaza. TX Prop. Code §92.052 is residential repair-duty secondary only.
What is a commercial lease indemnity clause for water damage?
It is a contractual promise that one party (often the tenant) will reimburse or defend the other for specified water-related losses. IRMI defines indemnity as an agreement that the indemnitor pays for potential losses or damages caused by the indemnitee. Justia Norfolk states that indemnity obligations are separate and distinct from insurance provisions (MA). Property insurance still follows ownership; indemnity is a separate reimbursement path.
Does an indemnity clause make one party's insurance cover the other party's property?
No. Indemnity creates reimbursement obligations between the parties; it does not by itself rewrite which first-party policy pays. Justia Norfolk states that an agreement to indemnify or hold harmless is distinct from an agreement to purchase insurance (MA). Public Counsel states that many commercial leases push tenants to their own insurance even when landlord negligence is involved.
Are broad indemnity / hold-harmless clauses enforceable for sprinkler water damage?
It depends on state law. IRMI states that broad form hold harmless agreements are unenforceable in a number of states. Justia MD §8-105 and Justia NY GOL §5-321 void certain landlord-negligence indemnity/exculpation clauses (MD/NY). Justia Borg-Warner and Justia University Plaza list sole-negligence limits in lease contexts (GA/FL).
Does an indemnity clause replace insurance payment after a sprinkler leak?
No. First-party building vs tenant-BPP still follows ownership; indemnity may create a separate reimbursement duty after insurance pays. Progressive lists burst pipes and broken sprinkler systems among internal water sources and states that general liability may apply if you cause water damage to someone else’s property. FirstLine states that the lease is the controlling document for maintenance duties and waivers of subrogation (GTA).
How do subrogation and waivers interact with lease indemnity after a paid claim?
IRMI defines subrogation as the insurer’s right, after payment of a loss, to recover from one legally liable. Travelers states that after claim payment the recovery right may transfer to the insurer. IRMI waiver and Public Counsel state that lease waivers of subrogation are often mutual acknowledgments that block insurer pursuit of the other party.