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Business Property: What Types of Insurance do I need?
Every landlord contends with some level of risk when it comes to letting their property to a third-party. Whilst a domestic landlord must only concern themselves with ensuring they are protected against a handful of tenants and risks; a commercial landlord must consider the whole business operation, its customers and the high level of foot traffic that is generated by the location of the building and the threat that it poses to their property.
Should the worst happen and your property is damaged or destroyed, the cost of rebuilding and the loss of income can be too much for a landlord to afford. A commercial property insurance policy will protect your company’s physical assets from fire, burst pipes, storms, theft and vandalism. Natural disasters are not usually covered by commercial property insurance; however, it may well be possible to add those risks to the policy.
How much does it cost?
A commercial property policy will consider the value of the property as well as the following factors.
• The industry that your tenant works within. For example, an estate agent poses less of a risk than a mechanic.
• Is the location of the property prone to natural disasters such as storms, floods or earthquakes? This could affect the premium.
• The age of the property.
• The materials used in its construction. A newer building with modern electrical systems, fireproof materials and updated plumbing will have lower premiums than an older converted building.
• Up-to-date fire and theft protection. Does your building have adequate security? How about fire alarms and sprinkler systems?
Do I need to protect the contents of my property?
Like all landlords, you are not obliged to protect your tenant’s possessions, whether they be stock, furniture or equipment. The tenant will need their own contents insurance policy. If you have your own contents in the property (such as shelves, furniture, etc.) you might wish to seek a commercial property insurance policy that incorporates elements of a contents policy, or you can buy a separate contents policy.
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