Commercial Property Insurance
Read more about commercial property or business insurance below.
What is commercial property insurance?
Commercial property insurance is a type of insurance that provides coverage for physical assets and properties owned by a business. It protects against various damages or loss of buildings, equipment, inventory, furniture, and other physical assets due to events like fire, theft, vandalism, natural disasters, or other unexpected circumstances. This insurance typically covers repairing or replacing damaged property and related expenses such as business interruption, loss of income, or additional costs incurred during the restoration period. This coverage can be tailored to specific business needs and may vary based on the type of property, location, and potential risks associated with the business operations.
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What insurance do you need for commercial property?
There are two types of commercial property insurance that you will need to protect your business’ building, equipment, furniture, and contents.
Building insurance
Building insurance is the primary coverage protecting the physical assets of a business, including buildings, equipment, inventory, and furniture, against various risks like fire, flood, theft, vandalism, natural disasters, and other accidental issues which impact the building. In most cases, building insurance only covers the cost of repairing damage incurred to the building, and it doesn’t cover losses associated with the contents damaged or lost due to a claim. Therefore, tenants need to take appropriate contents insurance for their possessions.
Contents insurance
Contents insurance in commercial property refers to a specific aspect of coverage within commercial property insurance. As a commercial tenant, you should have content insurance to cover any damages on your movable property and assets or contents inside business premises, such as furniture, inventory, and machinery, because these are not included in the building insurance. The landlord will be responsible for insuring their own contents in the property.
Who is responsible for commercial property insurance?
When renting a commercial property, the dynamics of commercial property insurance can vary based on the lease agreement and its responsibilities. Commercial tenants should communicate with their landlords and insurance companies to understand their insurance responsibilities clearly. Below are the insurance responsibilities for landlord and tenants in most cases:
Landlord’s insurance responsibility
1. Building structure coverage
The landlord typically maintains insurance for the physical structure of the building. This coverage usually includes the walls, roof, floors, and other structural elements. Then, the landlord will pass on the cost of building insurance to the commercial tenant, typically every year.
If you are leasing with Industrials, the insurance cost will be fixed when you take your lease (subject to annual increases of 3%), and we don’t charge a premium or commission for insuring your property. Contact us if you would like to learn more about the building insurance process when renting with Industrials.
2. Property coverage
The landlord may also insure the property they own within the building, such as common areas, equipment, and fixtures.
Tenant’s insurance responsibility
1. Tenant’s property
As a tenant, you’re usually responsible for insuring your own property within the leased space. This includes office equipment, inventory, furniture, and any improvements made to the unit
2. Liability coverage
Tenants might also need liability coverage to protect against claims of injury or damage to others while on the rented premises. Liability insurance provides financial protection in cases where you’re deemed responsible for someone else’s harm or damage to their property.
How does commercial property insurance work?
Securing commercial property insurance typically involves several steps. The process starts with the property owner or assigned policyholder initiating a claim in a commercial property insurance policy. After that, the insurers handle the claim review and decide the specific coverage required. The time to settle an insurance claim varies based on the claim type, its magnitude, and the insurer’s policies. There are various steps involved in the process, depending on your landlord’s or insurer’s regulations. Here’s how it typically works.
Policy Purchase
A business or property owner obtains a commercial property insurance policy from an insurer or insurance company. The policy is customised based on the specific needs and associated risks with business operations.
Coverage and premiums
The policy outlines the coverage for the property and assets against damages such as fire, theft, vandalism, natural disasters, and other covered events. The insured, landlord or property owner pays regular premiums to maintain coverage. Then, they normally recover the costs from the tenants every year.
Claim initiations
When damage or loss occurs to the insured property due to a covered event, the policyholder starts a claim by contacting the insurance company.
Claim Assessment
An insurance adjuster assesses the damage or loss to determine if it falls within the coverage outlined in the policy. They evaluate the extent of the damage and the claim’s validity.
Claim Settlement
Upon approval, the insurer compensates the policyholder for the covered losses or damages. This compensation helps repair or replace the damaged property, minimising the financial impact on the business.
Ensuring Business Continuity
If the damage causes a temporary halt in business operations, certain commercial property insurance policies include coverage for business interruption, providing compensation for lost income or additional expenses during the restoration period.
Policy Renewal and Adjustments
The policy is periodically renewed, and adjustments may be made based on changes in the business, property, or coverage needs. The effectiveness of commercial property insurance relies on the accuracy of the chosen coverage, adherence to policy terms, prompt claim reporting, and the insurer’s assessment and settlement processes. Each policy may have specific inclusions, exclusions, and limits, so businesses must understand their coverage thoroughly and tailor it to their specific requirements.
How does commercial property insurance work at Industrials?
At Industrials, we have two types of leases with different insurance approaches.
Standard Lease
The insurance cost for the property is divided based on the floor area of each unit, which varies for each property. The insurance policy is renewed annually, so changes may occur periodically. We leverage our size and purchasing power to secure comprehensive coverage for our customers at the most competitive rates possible, passing on the benefits directly without any added commissions or fees.
Smart Lease
With our Smart Lease, the insurance premium payable on your unit is fixed when you take your lease, subject to 3% annual increases. Any changes to the insurance cost will, therefore, be covered by Industrials during the term of your lease. No surprises.
If you are looking to rent an industrial unit in the UK, you can easily find available units for rent here or read our guide to rent. If you have further questions about how commercial property insurance works when renting with Industrials, please contact us at 0800 122 3330 or email us at enquiries@industrials.co.uk.
FAQ about commercial property insurance
What is covered by the building insurance?
Building insurance generally protects against losses arising from defects, damage, flooding, subsidence, and other unforeseen accidents affecting the building. Typically, it covers the expenses incurred in repairing damages to the building itself, but it doesn’t extend to losses related to damaged or lost contents resulting from a claim. Therefore, we strongly advise all our customers to acquire suitable contents insurance for their belongings.
A copy of the policy is available upon request from your Customer Engagement Manager. You can do so by completing the customer inquiry form or calling 0800 1 22 3330.
Do I need commercial property insurance?
If you rent an industrial unit for your business, commercial property insurance can protect your building and keep your income safe. This type of insurance provides coverage for unexpected damage to the premises, and without it, the expenses for repairs could be financially burdensome.
What is the excess on an insurance claim?
For every insurance claim made, you’ll be responsible for covering an excess ranging from £0 to £1,000, depending on the nature of the claim. The specific excess amounts are outlined in your insurance policy and available upon request from your Property Manager. If you are leasing with Industrials, you can simply obtain a copy by calling us at 0800 122 3330 or filling out the customer enquiry form.