One Injury, Two Defendants, One Lease

A customer leaving a yoga studio at Old Orchard Mall trips on a cracked tile in the mall’s shared entryway, breaking her wrist. She sues the studio and the property owner. Within weeks, the landlord’s lawyer demands that the studio defend the case and reimburse the landlord’s fees under the lease’s indemnification clause, even though the landlord maintains the entryway.

The studio’s owner wants to know why a tenant should pay for an accident in an area it does not control. The answer turns on three questions: who controlled the area, what the lease can lawfully require, and what insurance the lease required the tenant to buy.

Common Areas Usually Belong to the Landlord

Under Illinois law, liability for a dangerous condition generally follows control. A landlord that keeps control of entryways, lobbies, parking lots, and other common areas generally owes a duty to keep them reasonably safe, and that duty does not pass to a tenant because the tenant’s customers use the space. If the landlord knew or should have known about the broken tile, that exposure is the landlord’s own. If the studio created the hazard, for example by tracking water into the entryway, it may share responsibility.

The injured customer does not have to sort this out before suing. She can name everyone and let the case decide, which means the studio may need a defense long before anyone determines whether it did anything wrong.

Illinois Limits What a Lease Can Shift

Commercial leases often contain broad indemnity clauses, and some try to make the tenant answer for accidents the landlord caused. Under 765 ILCS 705/1, a lease provision that exempts a landlord from liability for personal injuries caused by its own negligence in operating or maintaining the premises is void as against public policy.

Two features of the statute matter here. First, it reaches beyond the tenant’s own space to the real property containing the leased premises, which is exactly where common-area accidents happen. Second, it protects against shifting personal injury liability; a commercial lease may still exempt the landlord from liability for property damage. A tenant can also agree to indemnify the landlord for injuries caused by the tenant’s own conduct, so when both contributed, the clause’s wording and the facts decide how much can be shifted.

The Insurance Promise Is Different

Illinois courts treat a tenant’s promise to buy insurance for the landlord differently from a promise to indemnify it. In Clarendon America Insurance Co. v. Prime Group Realty Services, the Illinois Appellate Court enforced a lease requirement that the tenant procure insurance protecting the landlord, even though directly shifting the landlord’s negligence to the tenant would raise public policy concerns.

That makes the lease’s insurance section as important as its indemnity clause. If the studio bought the coverage the lease required, the landlord may be an additional insured under the studio’s policy, and the right response to the landlord’s demand may be to send it to the studio’s insurer. Whether the landlord qualifies depends on the endorsement, not the certificate of insurance. Many endorsements cover the landlord only for injuries arising out of the tenant’s operations or caused at least in part by the tenant. If the studio never bought the required coverage, the landlord may instead claim breach of the lease, measured by the insurance that should have been there.

Contractors and service vendors face a different set of rules. Our article on snow removal contractors sued alongside their customers covers that side.

Before Responding to the Demand

Find out who maintained the entryway and what the landlord knew about the tile. Read the lease’s indemnity, insurance, and common-area provisions together. Obtain the studio’s complete policy and endorsements, not just the certificate, and notify the insurer promptly. Preserve photographs, maintenance requests, incident reports, and witness names. Do not agree to defend or reimburse the landlord until the lease and the statute have been measured against the facts.

A confident demand is not the same as a valid one.

We help tenants and businesses respond to indemnity demands and additional insured disputes. If your landlord has demanded a defense or reimbursement after an injury, we can review the lease and the policies before you respond. Contact us to discuss your matter.

This article provides general information and does not constitute legal advice. For guidance concerning a specific matter, see our insurance recovery services. Coverage depends on the policy wording, the facts, and applicable law. To discuss potential representation, request a consultation. Submitting an inquiry does not establish an attorney-client relationship.