Commercial Property Insurance

What is commercial property insurance, and why do you need it?

Commercial property insurance offers protection for property owners who are letting out buildings or facilities to other parties for commercial use. It can also be used to cover businesses for a property that they own and operate out of. As with all buildings, those used for commercial reasons are still susceptible to risks and hazards which can lead to damages, injuries and disruption to business operations.

Commercial building insurance is a great way of protecting not just the money that you’ve invested in a commercial building but also your ability to make future earnings. Cover can include buildings, stock, equipment, loss of income, business interruption, commercial property owners liability and employers liability. The common risks that commercial property is designed to insure against include fire damage, natural disasters, theft, vandalism and liability coverage.

Commercial property damage can also protect you against common damages such as subsistence and accidental damage to the property, so you can rest assured that your business premises will be adequately covered against nearly all eventualities.

When you start your search for the right commercial building insurance you may find that it can be referred to by many different names. While some of these policies may vary slightly in what is covered they are largely the same in their purpose of protecting your commercial property against common risks.

For example you may see commercial property referred to as the following:

• Business premises insurance
• Landlords commercial insurance
• Business building insurance
• Commercial building insurance

This list is not exhaustive, however it should provide you with a good general idea of what terms may be used interchangeably when you are hunting for the right commercial property insurance.

Here at Quotezone we are experts in Insurance comparison. We can help you find the best cover for your commercial properties, whether that be for office spaces, mixed use properties or simply your own building of operations….Quotezone. has you covered.

Did you know?

*Our data showed a 45% surge in demand for commercial property insurance during the last two quarters of 2021. This is a good indication that despite the recent hardships for the British economy, commerce has not slowed. This is backed by the British Retail Consortium (BRC) whose own data shows that consumer demand for high street goods as well as homeware shops, restaurants, and clothing stores have all been on the rise.

Why should I compare insurance policies for my commercial property?

Getting the right property insurance for your business is often stressful, going through multiple insurance websites hunting for the best price can be time consuming and tedious. Through our online comparison tool you can start saving by finding the right insurance policies fast.

Here’s how you can go about getting quotes from specialist insurance providers that operate throughout the UK:

Enter your details into our simple form and our insurance providers will then contact you directly and may provide you with a quotation, allowing you to compare the offerings.

What can commercial property insurance cover me for?

This type of insurance policy can cover the cost of repairing or rebuilding your business premises if damaged. If you own the commercial property your business operates in this may be worth considering. If you rent the premises for business purposes then the responsibility for business premises insurance still lies with the landlord.

If you own the commercial property that you will operate out of, consider the amount of time, energy and money that goes into getting a business off the ground, it’s easy to see why you’ll obviously want to protect it. For example, if you have spent the last couple of years getting your restaurant business a dedicated local following and steady supply of customers, only to have a fire destroy your premises, without insurance this could well be the end of your venture as a restaurant owner.

With the right level of commercial property cover however, you can rest more easily knowing that the damages are only a set back and your insurance will pay out for the reconstruction costs of your premises. Given the huge costs involved with the reconstruction, particularly of large buildings and facilities, being caught without a solid building insurance plan can be disastrous.

Commercial property insurance can also cover the cost of replacing damaged or stolen stock and equipment. Some commercial property policies will also include business interruption insurance, when damage to premises or equipment prevents the business operating as normal and will results in increased costs or decreased profits.

Most policies will also cover rental loss as a result of an insurable event. This means if you as a landlord receive regular rental payments from a third-party operating a business out of your property, you may be covered against the loss of income should an insurable event lead to the tenant no longer being in a position to pay. This usually occurs when damage or destruction to the property has left it no longer possible to rent out to a third party business.

What are the different types of commercial property?

There are various different types of commercial property that you can obtain an insurance policy for, these include properties such as:

• Cafés
• Distribution centres
• Factories
• Farm lands
• Fast food takeaway shops

Other common types of commercial properties which would require this type of insurance include; Gallery, Garage, Hospital, Hotel, Industrial property, Land (Landowners), Medical centre, Multifamily housing building, Nursing/Care home, Office, Public house, Restaurant, Salon, Shop, Shopping centre, Sports facility, Studio, Surgery or Warehouse.

No matter what type of commercial property you are looking to insure, Quotezone.co.uk can help. You may also require a mixed-use insurance policy if you are leasing out your building to different operators. For example, a situation where a florist operates on the first floor of your property, whilst a hair dresser or barber operates on the level above.

What our experts say:

“We champion increased consumer confidence and economic recovery, but consumers must remain vigilant. Many will face challenges in the coming months, particularly with rising energy and transport prices, so it is important to get value for money and find savings where possible” – Greg Wilson, Founder of Quotezone.co.uk.

Commercial Property Insurance guide

On the whole, commercial property insurance could be described as insurance for landlords that own business or commercial properties and typically rent them out to others. Commercial property insurance can also be taken out by landlords who work directly from their own properties without leasing to any tenants. In most instances, a person who acts as the commercial property landlord in the UK is usually the party expected to manage the insurance.

Whilst commercial insurance may not be compulsory it could prove invaluable if something happened to your business premises. Fires, flooding and even accidental damage could be catastrophic for any business and having the right cover can be instrumental in off setting the financial damages. Damages to commercial properties are usually not cheap, and depending on the size of the property and nature of the damage, the cost of repairs or rebuilds can be anywhere from 10s of thousands to millions of pounds.

Having the right insurance means that any insured losses are taken care of, and repairs can be paid for and put underway quickly in order to get things back on track. Finding a suitable insurer needn’t be a struggle, with Quotezone, specialist cover is simple to find and you can compare quotes in a matter of minutes.

Who pays for commercial property insurance?

Sorting out an insurance policy is typically the responsibility of the landlord of the property. Although the insurance policy will typically be under the name of the property owner, many landlords pass on the cost of insurance to the businesses renting the property. This cost would not equate to the renter paying for the insurance directly however, as this cost is usually factored into the rent directly.

An important note to remember is that renters have no legal obligation toward insuring the commercial property they will be renting. A property can also not be insured twice from two different parties so this means the landlord should be the insurer by default.

If you have any queries about your insurance, it is important to talk with your landlord directly. This will allow for you to clearly determine what is covered by the active insurance policy and what additional add-ons may be required for your business to operate in the property.

What is landlords insurance?

In the most technical sense, landlord insurance is simply an insurance cover for a landlord that rents out their property to a tenant, regardless of whether or not the tenant is operating a business within the property. Typical landlord insurance will protect a property against damages, landlords liability, loss of rent cover as well as contents insurance. However, given that operating a business can come with it’s own risk profile, this means that a landlord commercial property insurance policy will likely be the most appropriate type of coverage in the eyes of your insurer. This is again down to insurers doing everything they can to cover the risk of a claims and as a result a more specialised form of landlords insurance is usually required, this is where commercial property comes in.

Is Commercial Property Insurance the same as Landlord Insurance?

It may seem that landlord insurance is the same on the surface of things, however the two types of insurance may differ, particularly in the way a building is constructed and in terms of the type of tenant.

Commercial property insurance could include properties such as steel structures, barns, wooden premises and those with a flat roof. In terms inside the structure there may be a different type of heating system or complicated electrics that makes the whole premises much more niche when it comes to the type of insurance it may require.

Unusual structures, large premises and so on may require higher levels of cover which could be more complex than a typical landlord insurance policy could stretch to. These properties will usually require you to give more details to your insurer, some properties built with specialised materials may require specialist insurers. Such materials can include properties with timber, thatched roofs, and any other materials that would be considered non standard.

For tenants too, any commercial insurer will usually evaluate the kind of usage that the building is for and the type of activities that go on there. For example they will consider how many people may be present in the building at any one time, if any hazardous materials may be used there and the type of industrial equipment used etc. Evaluating the likely risk play a big part in determining the price of the premiums for any insurance.

What are the specifics covered by Commercial Property Insurance?

Ensuring that your level of coverage is sufficient from your insurance policy is likely to be a priority for many people. Your insurance could also include the following types of cover:

Property Owner’s Liability – This may be included within the premium or an added extra but could be a vital piece of cover in case a building owner is found liable for damage or injury due to neglect or a problem with the building such as loose flooring or an uneven step that someone subsequently falls upon. An owner rather than a tenant may be found responsible in this type of scenario as they may be required to maintain the building and ensure it is safe.

Rebuild Cost for Commercial Property – Getting an accurate re-build amount included in the premium could be crucial in the event of an entire premises being destroyed. This may be the downfall of many insurance quotes for any kind of buildings cover as being underinsured could mean not having enough money to re-build which might signal the end of a business.

Rent Losses – Unfortunately it may be that a building is rendered unusable if an incident occurred such as a fire or flooding. Despite this, rent losses may be recoverable if a building can’t be used due an insurable event. Under this insurance you will be able to claim back the otherwise expected rental income whilst your commercial property is under repair.

Contents Cover – Depending on the nature of the business it may be the case that a landlord should consider contents insurance as part of their property insurance policy. This could be necessary if a company is already fitted out for a hairdressers or café as an example as part of the tenancy arrangement. In these circumstances the landlord may wish to include landlord’s contents cover.

Accidental or Malicious Damage – This could include any damage that is carried out accidentally or with intent. These can be separate options to include and to decide which if any could be best it may be worth evaluating the business use and how secure the premises are. In terms of malicious damage it may be worth covering for damage caused on purpose as it may mean having enough money to put things right if the tenants damage a property during their tenancy.

It is always important to check the policy documentation on your potential insurance plan to make sure you have the appropriate coverage included.

How do I insure an empty commercial property?

If your commercial property will be unoccupied for a set period of time, usually longer than 30 days, you will need unoccupied property insurance.

When your property becomes vacant for whatever reason not involving an insurable event, your insurance company will typically allow for a short period of full cover. This is to give you time to make adjustments or find a new tenant to rent out the property. However if the property is left vacant for longer than the short time frame stipulated, you will need to move your insurance to an unoccupied commercial property policy. Insuring a vacant property can be more difficult due to the increased risk of theft, vandalism, and potential issues evicting squatters. Due to this vacant properties tend to be more expensive to insure, as the insurers will naturally wish to account for the increased probability of a claim being made.

How much does commercial property insurance cost?

Commercial property quotes are available in the UK from a couple of hundred pounds per year for smaller business premises to near £1000 per year for large complexes. The larger your building, naturally the more it will cost to insure so this is something to be aware of when hunting for commercial building insurance. The type of business which you run will also influence the exact price you can expect to pay on your premiums as some businesses are simply more risky to insure. For example if you are renting a property for use as an office space as opposed to a restaurant, your risk of fire is lower so your premiums will reflect this.

The easiest way for a landlord to reduce their premiums is to compare as many quotes as possible to see which insurer can offer them the best value for money. Remember, in some cases cheapest may not be the best as their could be some crucial coverage elements left out.

Here are some practical things you can do to reduce your insurance premiums

• Pay annually – This can help you avoid interest charges which exceed 20% APR
• Security – Keeping your property well secure will reduce your premiums, installing advanced security systems and deadlocks means your property is less likely to be breached or vandalised
• Opt for extra excess – This can directly lead to lower premiums
• Always compare the market – This can help you avoid paying more than is needed

What insurance are tenants usually responsible for when renting a commercial property?

Tenants will typically be responsible for insuring their own contents and so they’ll need to arrange this policy themselves. Some insurance policies may cover a tenants contents, such as new fittings, IT installations and other fixtures but this will need to be mediated between the landlord and tenants. If there are any new structural changes to the commercial property, such as new kitchens, flooring, heating systems and so on, these will need to be covered by the tenant if not covered on the landlords commercial property policy.

Finding the right Commercial Property Insurance

Many business building owners may want the peace of mind that could come with knowing their building is adequately insured. An unfortunate fact of life is that the unexpected can just happen, and the only thing we can do is to be as prepared as possible for any eventuality. Finding the right policy that matches all the coverage requirements of your particular building or business can be the first step for many to full peace of mind.

Finding the right commercial property insurance with our comparison tool can help you save time and money, it’s also pretty convenient. By using a comparison tool, a business owner has the flexibility to search for cover in their own time and at their own pace in order to secure the best policy.