What is Commercial Building Insurance?


The world of insurance can be rather a minefield - simply because there are just so many types of insurance available. There is a policy for almost anything you can imagine, and because the world of business is so intricate, widespread and varied, this creates a maze of insurance options that can prove pretty difficult to navigate. Commercial building insurance is similar to landlord insurance, in that it covers an individual or company letting out a property to a third party. However, unlike landlord insurance, the property that is being leased is one from which the tenant intends to run a business or commercial outlet, and so there are a number of more complex factors to take into account.

One of these factors is the equipment that can be expected to be used, and the activities that will be taking place, within the property. It may be that the tenants and their employees will need to handle hazardous materials or machinery as part of their daily routines. The structure should meet the regulations required for these purposes, and should be correctly insured to this end also. The types of buildings that can be covered by a commercial building insurance policy are hugely varied, and can include anything from laboratories to offices to barns. Damage to these properties or any of their fittings can prove complex and expensive to fix - often more so than damage to a domestic rental property - so commercial property insurance must be employed to cover this.

Another factor is liability insurance. Because a tenant is running a business out of a building you own, if a third party sustains injury, or their property is damaged, then you can be liable if your property has not been correctly maintained. Commercial building insurance provides third party cover for these purposes.

This form of policy should also cover you for damage up to the scale of a full rebuild. If a fire or a flood takes place, your insurance must be able to cover the damage caused. Also, if this damage, or another issue, renders the property unusable for a period of time, policies are available that cover the amount you will lose out on in rent. Of course, this amount only covers a finite period of time, so it is expected that you will work to make your property functional as quickly as possible. You need to be aware that accidental damage is often excluded from commercial building insurance policies, but is sometimes available as an optional add-on - as are malicious damage by a tenant and legal cover for occasions where you may need to take a tenant to court to claim unpaid rent. If you require any of these options, it’s vital that you speak to your insurer about them right at the start, when you are putting your cover together.

Rigby Financial is a family owned Independent Insurance Intermediary & Financial Advisors. If you are interested in our services, simply call us today on 01744 886077 and we will be more than happy to discuss your requirements.