Definition - What does Leasehold mean?
A leasehold is an asset, such as an apartment, that is owned by one party but held by another through a lease.
Leasehold insurance exists to protect policyholders in the event that their leasehold is cancelled.
Insuranceopedia explains Leasehold
A leasehold could be cancelled if, for example, an apartment or commercial building burns down. In such a circumstance, an entirely new building would have to be constructed and rent prices in the new building could be much higher. The previously agreed-upon rent amounts in the lease would be voided and a new one would have to be drafted for the buildings and its occupants.
Leasehold insurance would provide coverage for losses resulting from such an incident.