This guide explores what you need to consider when insuring commercial property, whether tenant or landlord, to protect yourself in case the worst were to happen.
Insurance is a necessary but tedious fact of life, and it’s no different when it comes to commercial property. As well as buildings insurance, you may want to protect the contents and loss of business. Tenants and landlords have different responsibilities when it comes to commercial insurance.
Commercial buildings insurance can be purchased as a standalone policy or to include add-ons such as contents and stock. As with all types of insurance, the premium will depend upon a number of factors such as:
Insurance policy cover will vary between insurers. It goes without saying that you should be aware of what is covered, as well as which excesses apply in the event of a claim for each of the following situations:
Your insurer will need an indicative rebuild cost; most provide blanket cover of up to £2 million.
If your premises store, permanently or otherwise, anything or value or of intrinsic importance to the continued operation and performance of your business, contents insurance should be considered. For example, if you are housing one of the following you may want to protect yourself:
It’s important that you take regular inventory checks of stock and compile an asset register if applicable.
You can add numerous types of business cover to your commercial property policy to suit the needs and risks your business may face:
No, but if you have a commercial mortgage then your lender will probably insist. If you own the property outright, do you want to take the risk?
Unoccupied commercial properties, for example those undergoing renovations or otherwise, are typically more difficult to insure than those with sitting tenants. Vacancy can attract unwanted visitors, vandalism, theft and degrading damages such as burst pipes that could go unnoticed for prolonged periods (exacerbating the damage). If your premises become vacant you should discuss this with your current insurer and/or seek additional cover.
Commercial buildings insurance is the responsibility of the landlord, tenants are only responsible for the contents and any damage that they may cause to the building through negligence.
Not normally, there are usually specific exclusions for these acts though specialist insurers will take an interest for additional premiums.
The content in this post is for informational purposes only and is not intended to replace legal or specialist advice. Before making any decisions we recommend you seek professional advice.