Protect Your Investment
Owning a commercial property is a dream come true for many. After all, it’s a great source of income. However, this investment can also cause you sleepless nights if it’s not insured correctly, because anything can happen to it and the potentially valuable goods it houses. On a regular basis we hear of landlords losing out on thousands as they have only insured the bricks and mortar. This is a common mistake and something that can be rectified very easily.
What is a Commercial Property?
Before we delve into the detail of commercial property insurance and how to make sure you are protected, let’s quickly define what a commercial property is. In essence, commercial property refers to any building that you purchase for the sake of using it to generate income. This can be any building, or property, that is rented out to residential or commercial tenants.
On a regular basis we hear of landlords losing out on thousands as they have only insured the bricks and mortar.
What Commercial Property Insurance Should You Have?
So, what kind of cover should you get with commercial property insurance? The two absolute essentials are Buildings Cover and Property Owners Liability cover, but there is so much more to consider. Here is a quick guide to each option and a brief summary of what each section covers.
- Buildings cover. This protects your investment in the eventuality of your building being damaged by an insured peril. Common perils include fire, escape of water, accidental damage, flood, storm damage and malicious damage. Not all policies are created the same so it is essential to read the small print carefully, or use a good quality insurance broker.
- Loss of rent. Protect yourself from the loss of rental income following damage to your property. Again, this would need to be as a result of an insured peril. It is important to consider this cover, as without it should a disaster strike you will be without rental income.
- Alternative accommodation. Often in tenancy agreements there is a condition that you must provide alternative accommodation, if your property is no longer suitable to live, or work in. If this occurs due to an insured peril i.e. fire, flood, escape of water, then alternative accommodation cover should cover the cost to relocate tenants temporarily. This cover is available as an option on all good property owners policy, and should be given consideration when arranging your insurance. The cost to relocate tenants often runs into the tens of thousands.
- Fixtures and fittings. Often these are covered under the buildings cover, but it is important to check as some insurers do not provide cover under this section. Another thing to consider is that if you own a flat, i.e. the leaseholder, but the buildings insurance is arranged by the freeholder, then your fixtures and fittings will not be insured. You will need to source your own cover.
- Landlord contents. Furniture, and contents in communal areas, can run into the thousands. Many property owners fail to consider the financial exposure and are left out of pocket. Make sure you consider what it would cost you to refurnish if there was a loss.
- Property owners liability. Since it is your building, any injury to persons or damage to property caused by your building is your responsibility. Public liability insurance will protect you from the high legal and medical costs you could incur if legal action is taken against you. A single compensation claim can be financially crippling and in today’s litigious society people are quick to make a claim. Do not take a risk – Make sure you are protected.
- Legal expenses. No doubt you will try to have a great relationship with your tenants, but if disputes occur then you could discover that you have large legal fees to contend with. This section should cover you if you need to take a tenant to court to pursue rental arrears, or if you need to evict a tenant. It is important that you always call through to the legal expenses provider in the first instance to check you are covered and to ensure that you are following the right procedure.
Commercial Property Insurance & Risk
One thing every successful property owner does is mitigate as many risks as possible – and insuring commercial property ranks high
As a property owner, you know that property is a great and ‘relatively safe’ investment. One thing every successful property owner does is mitigate as many risks as possible – and insuring commercial property ranks high. So you need to realise that insuring your commercial property correctly is not an expense, it’s a necessity you can’t afford not to have.
Contact us today at 0113 390 46 46 and we’ll get you a quote – tailored for you and your commercial property.