Commercial leases are incredibly prevalent for small businesses of all kinds since there are several advantages to not owning your building or office space.
Despite the fact that you are not accountable for any structural expenditures, such as replacing a broken toilet or repairing the old elevator in your lobby, your firm may be liable for any damages to your office space caused by your company’s operational activities.
Assume your line of work creates an electrical fire, destroying a part of your workplace and causing damage to other offices in your building. Suppose your firm is determined to be at fault. In that case, you may be held liable for the cost of damages, which is why a rising number of landlords now demand small business owners to obtain liability insurance plans.
The following discusses the process of obtaining commercial renters insurance, why it is beneficial to your business in the near term, and how it can protect you in the long run.
Commercial Rental Insurance
When it comes to commercial renters insurance, you have a variety of liability coverage options to protect your company, workers, and physical office space. But first, let’s define renters insurance for the sake of clarity.
Renters insurance is essentially the merging of general liability insurance, commercial property insurance, and business income insurance into a single Business Owner’s Policy (BOP), which covers all forms of potential damages to your rented property.
Renters insurance is usually connected with landlord insurance and commercial property insurance; however, these types of coverages vary from renters insurance in two ways:
- Property-owner Insurance: This is a policy obtained by a landlord to pay for damages to their buildings and other property. It is also known as homeowners insurance.
- Commercial Property Insurance: This coverage protects your company by reimbursing the costs of your material things in the event of a loss, such as fire or theft.
While renters insurance and landlord insurance are similar, each serves a very different and specialised purpose for either the landlord or you, the tenant.
The Average Cost of Commercial Property Insurance
The cost of commercial property coverage is primarily determined by the location of your business, the industry in which you operate, and the sort of business you operate.
Most commercial property insurance plans are less expensive when combined with general liability coverage in the form of a Business Owner’s Policy. The typical premium for a Business Owner’s Policy is roughly £50 per month or slightly more than £600 per year.
Major Rental Insurance Coverage You Need to Know
There are several different types of business insurance coverage that you may want to include in your renter’s insurance policy. Let’s look at the most common extra coverage options:
- General liability insurance is one of the most prevalent forms of insurance available, and it protects you from third-party claims made by your commercial tenants or clients. The policy provides coverage for property damage, medical expenditures, and bodily injury claims.
- This coverage assists in covering the expenses of replacing or repairing any firm property that has been lost, stolen, or destroyed, such as inventory, computers, and other electronic equipment utilised in your day-to-day operations. Commercial property insurance is a mix of commercial property insurance and business personal property insurance—coverage that protects what’s inside the building—and can be purchased together or individually.
- If your firm is unable to function due to damage caused by events beyond your control, such as theft, fire, or wind, business income insurance can help.
- Company interruption insurance, like business income insurance, can cover you if your income is disrupted by an unforeseen occurrence that causes you to breach your lease agreement and skip rent. This coverage differs from company income insurance because it is designed to cover your rent.
- This car cover protects your commercial vehicles against theft, vandalism, and accidents that may occur as a consequence of often coming and departing for business from your landlord’s property or leaving and storing your commercial vehicles on your landlord’s property.
Workers’ compensation insurance, which is legally needed for company owners in most jurisdictions, protects your employees if they are hurt on the job at your office or workspace.
The Final Takeaway
If you’re on the fence about getting renters insurance, you should know that the benefits much outweigh the drawbacks. The benefits are that you can go about your business knowing that your workplace is secured from the unexpected, and you can rest easy knowing that your landlord is more likely to have your back because you effectively have theirs by having your renters’ insurance policy.
The disadvantage is that you are exposed to a host of obligations that might have been avoided if you had obtained company insurance coverage.
Purchasing commercial renters insurance is becoming more popular among business tenants around the country. While you have numerous alternatives, keep Heritage Insurance in mind for the most recent renters insurance packages as well as all of your small business insurance requirements.