40.46 1. Insurance Defaults

• Jurisdiction: New York

1. Insurance Defaults

Insurance defaults are not curable. Insurance is highly material and the tenant must have insurance in place during the times and in the amounts requisite in the lease, or else a lease can be terminated. The landlord deserves the benefit of their insurance bargain.¹⁵¹⁰

It has been held that even if the tenant wants to cure an insurance default, to do so is simply impossible. Tenant cannot cure by procuring, during the cure period, insurance coverage prospectively, as such policy will not protect landlord against the unknown universe of any claims arising during the period of no insurance coverage.¹⁵¹¹

The landlord has no obligation to get the insurance for tenant and charge it back as additional rent. Furthermore, the sub-tenant’s insurance does not satisfy the tenant’s obligation.¹⁵¹² Moreover, certificates of insurance, which were issued as a matter of information only, are insufficient to establish that it maintained the requisite insurance or was capable of curing its default.¹⁵¹³

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Notes:

^[1510] . Kel Kim Corp. v. Central Mkts., 70 N.Y.2d 900, 524 N.Y.S.2d 384 (1987); C & N Camera & Electronics, Inc. v. Farmore Realty, Inc., 178 A.D.2d 310, 577 N.Y.S.2d 613 (1st Dep’t 1991). But see Khatari v. Shami, 35 Misc. 3d 1211(A), 950 N.Y.S.2d 723 (Sup. Ct., Kings Co. 2012) (waiver of the insurance default based on an earlier case between the parties).

^[1511] . Kyung Sik Kim v. Idylwood, N.Y., LLC, 66 A.D.3d 528, 529, 886 N.Y.S.2d 337 (1st Dep’t 2009).

^[1512] . 166 Enterprises Corp. v. I G Second Generation Partners, L.P., 81 A.D.3d 154, 917 N.Y.S.2d 143 (1st Dep’t 2011).

^[1513] . JT Queens Carwash, Inc. v. 88-16 N. Blvd., LLC, 101 A.D.3d 1089, 1090, 956 N.Y.S.2d 536 (2d Dep’t 2012).