Landlord Commercial Building Insurance

Key Factors for Insuring Your Commercial Rental Property in the UK

Insuring a commercial investment property comes with unique considerations compared to residential lets. Landlords must cater for different tenant risks and higher liability exposures.

This guide covers key considerations when arranging landlord commercial building insurance in the UK.

Understand Tenant Business Risks

Review what kind of business your commercial tenants operate. High-risk trades like welding or hazardous chemicals will impact insurability. Seek clarity on intended business activities before the tenancy begins.

Get Accurate Rebuilding Costs

Work with a chartered surveyor and builders to calculate potential rebuild costs if the commercial property was damaged beyond repair. This includes materials, demolition, increased regulation costs and professional fees.

Factor in Business Interruption Cover

Standard building insurance only covers rebuilding costs. Add business interruption cover to protect rental income loss while the commercial property is unoccupied. Set the indemnity period based on typical repair timeframes.

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Tailor Contents Cover to Commercial Use

Provide an inventory of any contents included, like office furniture or kitchen equipment. Ensure valuations match current replacement costs. Detail any high-value electronic items separately.

Check Liability Limits for Commercial Premises

Public liability insurance of £5 million is mandatory for commercial rental properties. But most insurers will push this to £10 million or higher for commercial lets to cover the increased risk.

Review Fire Safety Standards

Insurers will want evidence of robust fire precautions for commercial buildings like fire extinguishers, emergency lighting and alarm systems. Arranging regular fire safety checks is advisable.

Understand Permitted Business Use Clauses

Study permitted business use clauses carefully. Many insurers restrict cover to low-risk office or retail uses only. Using the property for manufacturing, industrial processes or food preparation may invalidate the policy.

Consider Terrorism Cover

Terrorism insurance is not standard. Given the high footfall, public liability and fire risks of commercial property, terrorism cover is worth considering. Check if the insurer includes this or offers it optionally.

Check Unoccupied Commercial Building Cover

Void periods between commercial lettings can last 6-12 months. Unoccupied commercial building insurance will be needed during extended vacancies to maintain adequate cover.

Compare Specialist Commercial Insurers

Mainstream insurers don’t cater well for unique commercial property risks. Seek out providers that specialise in commercial landlord cover for the best protection.

Assess Rental Income Risks

Consider worst-case scenarios like major floods or fires that could render the building unsafe for months. Ensure business interruption cover reflects the full extent of potential lost rent, accounting for multiple occupants.

Understand Health & Safety Obligations

Landlords must comply with regulations around fire safety, employee liability, and public access for commercial properties. Failure to meet requirements could invalidate insurance.

Arranging the right insurance for commercial rental property requires assessing tenant risks, and rebuilding values and liability exposures accurately. While more complex, specialist commercial landlord policies provide peace of mind.

Commercial Landlord Insurance Providers in the UK

Some of the main insurers offering specialist landlord insurance for commercial properties in the UK include:

• Aviva – Has a dedicated commercial property landlord policy with robust public liability cover.
• AXA – Provides a range of commercial landlord policies tailored to the business sector.
• RSA – Offers commercial property insurance, including loss of rent protection and terrorism cover.
• Zurich – Has an experienced commercial property team catering to various trades and business sizes.
• Hiscox – Specialises in commercial property insurance for high-value metropolitan premises.
• NIG – Offers commercial landlord policies tailored for businesses with up to 15 employees.

Getting multiple quotes from these and other commercial property specialists allows landlords to compare costs and find the optimal cover.

The Benefit of Price Comparison for Commercial Cover

While mainstream comparison sites focus on personal insurance, there are relatively few services to compare commercial landlord insurance. Our service allows commercial landlords to compare quotes across multiple insurers via one portal when arranging their building, contents and liability cover.

Using a comparison service saves time contacting individual providers and simplifies assessing costs. However, be sure to still evaluate policy details thoroughly rather than judging on price alone.