One of the most important questions you’ll need to answer as an entrepreneur renting a commercial space is whether or not you need commercial tenant insurance, and if so, how much and what type you’ll need. Here are some questions to ask yourself that will help determine your needs: Do I have inventory in my store? If so, how much do I have on hand? Does the landlord insure the building? If so, will they cover my inventory too? What will happen if my store or building catches fire or floods? Will I be fully reimbursed by my insurer or by the landlord’s insurer?
Choosing the Right Commercial Property
If you’re planning to lease commercial property, it’s important to understand what kind of risks are associated with that choice. Your residence is probably not a good basis for comparison. Homes often have foundations or plumbing things that are typically owned by someone else and taken care of by professionals. Commercial property, on the other hand, doesn’t usually include such things, which means you might be responsible for them in case something happens. Things like water damage or broken pipes can cost thousands of dollars to fix and could land you in financial hot water if your commercial tenant insurance doesn’t cover them. If you haven’t researched these costs before signing a lease, ask your landlord about them before signing on any dotted lines.
What Does a Policy Cover?
You'd be surprised how many small business owners don't know exactly what type of insurance they need to ensure their commercial tenant. But, when you think about it, isn't that your real goal? You want to make sure your property is protected against natural disasters and other unexpected events. That's why an experienced insurance broker can help you properly protect your investment in commercial tenant insurance. If a natural disaster strikes or if someone causes damage to one of your properties, chances are you will be able to handle most of it with just a commercial tenant. However, if someone dies on your property or there is a crime committed against you or one of your employees, then there are other types of coverage that should be discussed with an Business Insurance broker.
A general insurance policy will cover property damage that is caused by fire, smoke, vandalism, theft, and more. This type of coverage typically also covers business interruption and extra living expenses if you have to move temporarily. For example, let's say you rent out office space in a building that burns down. A general commercial tenant insurance policy would typically help you get it rebuilt quickly or help pay for temporary office space until your main location can be restored. If a major disaster strikes your area but does not hit one of your properties directly, then there are other types of policies you might want to take a look at as well. For example, flood and earthquake coverage can help protect against less predictable risks like those posed by nature.
What Can I Add to My Policy?
It’s often a good idea to take a look at your commercial insurance policy, which can cover all your business property. Depending on your needs, you may also want to purchase additional coverage.
Do you have valuable items that aren’t covered by your standard policy? For example, if you run a restaurant and want to protect your wine collection or other investment items, consider purchasing additional coverage. If a natural disaster damages part of your property, it’s also a good idea to consider purchasing coverage for that eventuality.
Purchasing insurance coverage for your inventory and equipment can also help you protect valuable investments. If a tornado damages your property, it’s nice to know that replacement costs will be covered by insurance. It may also be a good idea to purchase general liability coverage, especially if you run an especially high-risk business such as a restaurant or gym. While these businesses don’t often encounter legal issues, when they do occur, damage awards can be substantial due to their public exposure. General liability covers legal defense and court costs associated with claims made against your business activity or premises.
Why Should You Consider Buying Insurance?
If you own a business, there are some things that you need to buy to protect your business; it’s no different for commercial tenants. If you lease your commercial space, then it’s likely that your landlord requires that you have insurance on your building, but in many cases doesn’t pay for it and makes it up as a part of their rent. Whether or not you choose to get involved with commercial tenant insurance is ultimately up to you, but it can provide a lot of protection if something bad were to happen. Commercial insurance protects against property damage from natural disasters or man-made destruction, as well as coverage for legal defense costs if something were to go wrong.
