Yes. If your commercial lease says you must carry insurance that protects the landlord against “all claims,” and your policy only covers lawsuits, you can end up paying the landlord’s settlement out of your own pocket. In this case the Appeals Court held a commercial tenant liable for a $365,000 injury settlement plus the landlord’s legal fees, though it sent the case back to fix who gets paid and to credit a separate settlement. This is an unpublished Appeals Court decision under Rule 23.0, which courts may cite as persuasive but not as binding precedent.
What happened
A business leased commercial premises. The lease required the tenant to keep comprehensive liability insurance covering both the landlord and the tenant against all claims and demands for injury on the premises or the adjoining sidewalk, in an amount of at least one million dollars. The tenant bought a commercial general liability policy, but that policy only promised to defend “suits.” One of the tenant’s employees was hurt at the premises and made a claim against the landlord side, but never filed a lawsuit. The tenant’s insurer refused to defend because there was no suit. The landlord side settled the claim for $365,000, which their own insurer paid, and then sued the tenant for breach of the lease.
What the court decided
In Global Companies LLC v. HOP Energy, LLC, No. 23-P-935 (Mass. App. Ct. June 16, 2025) (Rule 23.0 decision), the Appeals Court affirmed that the tenant breached the lease, but vacated parts of the judgment.
The lease asked for more than the tenant bought. The court reviewed the lease and the policy on its own, without deferring to the trial judge, because reading a contract is a question of law. James B. Nutter & Co. v. Estate of Murphy, 478 Mass. 664 (2018). The lease plainly required coverage for “claims and demands.” The policy covered only suits. That gap was a breach of the lease, and the damages were the settlement plus the cost of defending the claim.
The insurer’s paperwork questions did not matter. The tenant argued its insurer refused to defend because the landlord side did not answer the insurer’s questions about who was a named landlord. The court said that was beside the point. The policy did not cover a claim that never became a suit, so the insurer would have refused anyway.
No right to a trial on undisputed facts. The tenant said it was denied a jury trial. Summary judgment is proper when there is no genuine dispute of material fact. Correllas v. Viveiros, 410 Mass. 314 (1991). The tenant pointed to no real factual dispute.
The settlement amount stood. The tenant put in no evidence that $365,000 was unreasonable. Admissible evidence showed the employee fell and was hurt at the premises, first demanded $1 million, and settled for $365,000. The court found that enough to support the finding that the settlement was fair and reasonable.
Fees under the lease. The lease had a clause making the losing party pay the winner’s reasonable attorney’s fees. The court upheld the trial fee award and allowed appellate fees, except for the two issues the tenant won, under the procedure in Fabre v. Walton, 441 Mass. 9 (2004).
What the tenant won. The judgment named three related companies but not the one company that actually signed the lease as landlord, and nothing explained why the named companies could collect. Being related companies was not enough. The court sent the case back to decide which plaintiffs were actually harmed. It also ordered the judgment reduced by a $17,500 settlement the landlord side received from the tenant’s insurance agent, with interest recalculated.
What this means for you
If you rent commercial space, your lease probably tells you what insurance to buy. Many tenants hand the lease to a broker and assume the policy matches. This case shows how expensive a small wording gap can be. A promise to insure the landlord against “claims” is broader than a standard policy that defends only “suits.” When the insurer says no, the landlord can come after you for breach of the lease, and the lease’s fee clause can add the landlord’s legal bills on top.
The judgment still had to explain which company was harmed and why it could collect for a breach of a lease that only one company signed. Related companies are not automatically interchangeable.
What to do now
- Pull your lease and read the insurance section word for word, including who must be insured and against what.
- Send that section to your broker and ask in writing whether your policy covers claims and demands, not only lawsuits.
- Get certificates of insurance that name the exact landlord entity that signed the lease.
- Check whether your lease has a fee shifting clause, because it raises the cost of losing any dispute.
- If a claim arises at your premises, notify your insurer and the landlord in writing right away and keep copies.
If this is your situation, call Doubleday Law at (617) 575-2006 or tell us what happened. These cases move on short deadlines.
Prior results do not guarantee a similar outcome.
