What must be determined about the property for an insurance clause to be effective?

For an insurance clause to be effective, it is crucial to establish that the property is insured against loss by specified risks. This means the insurance policy needs to explicitly cover the types of perils that could potentially cause damage to the property. Different insurance policies cover various risks—such as fire, theft, or natural disasters—so identifying and confirming these specified risks ensures that both the landlord and tenant understand what protections are in place.

The effectiveness of the insurance clause hinges on this clarity because, without specific coverage for certain risks, the insurance might not respond when a loss event occurs, leaving parties unprotected. This acknowledgment is essential for both risk management and financial security within the tenant-landlord relationship, ensuring that either party knows how damages and losses will be handled.

In contrast, determining the property's value in the current market, assessing the tenant's insurance coverage, and outlining the required upkeep and maintenance by the landlord, although important elements in their own rights, do not directly impact the efficacy of the insurance clause regarding coverage against specified risks. The primary focus of the insurance clause is to ensure the property is protected against particular threats that could lead to potential loss.