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22 Guidebook for Developing and Leasing Airport Property requirements, at a minimum, should outline coverage types and amounts so that the airport is protected from financial liability. These requirements will vary based upon the type of tenant (e.g., private versus commercial enterprise), the ownership of the physical structures and equip- ment (e.g., airport sponsor or lessee), the scale of the operation, and the relative risk of harm or loss based upon the type of enterprise. Typical insurance coverage will include (depending upon lessee, ownership of improvements, and anticipated activity): · Property (structure and/or contents), · General liability or commercial general liability, · Automobile, · Fire, · Liability, and · Environmental. The level of coverage required can be set by the airport sponsor or may be assigned by state or local authorities. Excessive coverage requirements may present an undue financial burden on airport tenants and warrants consideration when setting minimum levels. In September 2008, Airports Council International North America (ACI-NA) surveyed concessionaires at commer- cial service airports of all sizes (ACI-NA Phase II: Concessionaires Survey), focusing on insurance and risk management issues. The report was completed within the past few years and may be a useful resource to the reader of this Guidebook when setting insurance levels. The survey results reveal the various types of insurance an airport should contemplate (e.g., property, general liabil- ity, auto, and fire) as well as minimum amounts for the various categories prevalent at air- ports across the country. The survey report also considers airports of different sizes. Surveys such as these provide relevant benchmarks for the airport sponsor when establishing mini- mum levels of insurance coverage. Because an airport sponsor must balance the need for pro- tection of its interest with the real costs imposed on tenants and airport users, establishing appropriate levels of insurance coverage is an important topic that has direct consequences to the tenant's ability to maintain a successful business venture. Being consistent with like airports, without leaving the airport sponsor unreasonably exposed to risk, is a responsible approach to finding that balance. If the airport sponsor is the owner of the physical improvements on the land being leased (either through new construction funded by the airport or by means of reversion due to the termination of a lease agreement), the airport may be responsible for premises insurance. An umbrella policy may be the most effective approach, though liability, contents (e.g., aircraft and/or equipment), and other stipulated hazards such as environmental contamination generally remain the respon- sibility of the tenant. It is the responsibility of the airport sponsor to ensure that the lessee and any sublessee are in compliance with the insurance requirements outlined within the lease. This is typically accom- plished by requiring the lessee to provide airport management with appropriate insurance doc- umentation (Certificate of Insurance) on an annual basis from a reputable insurance firm licensed to do business in the state in which the airport is located. The lease agreement may include language that requires the lessee to notify the airport of the cancellation of insurance, within a stipulated time frame, should such an event occur. 2.2.16 Environmental Environmental awareness and consciousness has risen significantly in past decades within many facets of modern life. Real estate, and more specifically, leased airport property is no exception. In fact, environmental consideration is now routinely a point of significant discussion in lease negotiations.