Property Management

A tenant in an Indiana commercial building experiences a flood from a burst pipe in the common area that damages their inventory. The lease includes a 'waiver of subrogation.' This means:

AThe tenant waives all claims against the landlord for damages
BThe tenant's insurance company cannot pursue a claim against the landlord after paying the tenant's claim✓ Correct
CThe landlord waives all claims against the tenant
DThe insurance companies share the loss equally

Explanation

A waiver of subrogation in a commercial lease prevents the insurance company that paid a claim from pursuing the other party (landlord or tenant) for recovery of what it paid. This reduces litigation between parties to a lease.

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