A Mortgage Clause Helps Mitigate a Lender’s Risk
Most commercial real estate transactions include a standard mortgage clause amid the commercial property insurance policy documents. It is usually listed under Additional Conditions, and it details the obligations the insurance company must fulfill should the property be damaged or destroyed while still mortgaged.
As you might expect, this is an important clause because it helps protect the lender by giving them the right to obtain compensation for a loss on the mortgaged property. It even allows the lender to obtain compensation if the policyholder violated the terms of their insurance policy. more “What Is a Mortgage Clause?”
