A recent decision by a New York court reminds us that it is crucial for commercial property owners to protect themselves from claims involving their tenants.

In the case, a contractor hired by a deli tenant to paint a sign sued the landlord for violating New York’s Labor Laws. The landlord had no idea that its tenant had even hired the sign painter who fell off a ladder and was hurt.

Even though the landlord wasn’t involved in and didn’t even know about the deli’s sign-painting project, the court found it was responsible for the contractor’s injuries.

While this decision may seem harsh for the commercial landlord, it’s not unusual in New York because the Labor Law imposes what’s called absolute liability on general contractors and owners of commercial buildings. This means that, in general, if a construction worker falls from a height during his work, the building owner must pay for all the damages, even if the worker was being careless. Therefore, even a landlord that doesn’t know its tenant is doing some construction – however minor – can sometimes be liable.

As a result, commercial landlords should be proactive by including hold harmless clauses (also called indemnification) in their leases as well as requiring that tenants list them as an additional insured on their insurance policies. Renting to a tenant on a month-to-month basis, while simple, doesn’t provide these important protections.

If you have questions about updating your leases, the attorneys at The Coppola Firm have the experience you need to help better protect yourself in the event of a claim.