If you own or lease a commercial property you must have commercial property insurance. Actually, we should qualify this statement with ‘you must have the right commercial property insurance’.
One of the most upsetting situations we encounter is that of a business owner or property investor whose premises have suffered a disaster such as a fire, flood, or explosion and their insurance does not respond because they either:
- Did not take out correct or adequate cover when they purchased their commercial premisses insurance policy, or
- Their business has grown and they did not update their insurance to reflect this
To ensure you do not face such a stressful situation, we have prepared this brief explanation of commercial property insurance.
What is commercial property insurance?
Commercial property insurance is a type of building insurance policy. It is intended for owners of buildings that function as commercial premises, whether you lease the property to a commercial tenant or run your own business from it.
When it comes to insurance for the building itself the type and extent of cover required will depend on:
- The building type - commercial property buildings can vary widely in design and features. For example, if it has a complex heating or electric system, you will need to ensure that your insurance cover extends to repairing or replacing it.
- The use of the building - if the business carried out on the premises involves the use or manufacturing of hazardous materials or expensive goods or has hundreds of people coming in and out of the building every day, special insurance cover will be required.
How much commercial property insurance do I need?
If you own or lease a commercial property you will need to have the following cover:
- Commercial building insurance – provides insurance against damage to the building itself. For example, if the roof of the building is damaged in a storm, your insurance should respond to fund the repairs
- Property owner’s public liability insurance – covers you against claims and legal fees by a third party who suffers an injury or property damage at the premises due to negligence
- Contents insurance – covers the costs of any loss or accidental damage concerning the contents of the building
- Loss of rent – ensures that you still receive rent if the premises become unusable following a disaster such as a flood or fire
Get legal assistance from LawBite
Having adequate commercial insurance is essential to ensure your business and/or property investment has the protection it needs to bounce back from theft, damage, or a disaster. To find out more about getting the right cover and any legal implications concerning your insurance policy, book a free 15 minute consultation with one of our team below.
- What does business insurance cover
- Beginners guide to leasing commercial property
- What is a commercial property rent review
- Landlord and tenant responsibilities for commercial premises
- How to change a residential property to commercial
- How to lease commercial retail space
- Carrying out alterations to commercial lease premises