What Is Commercial Property Insurance And Do You Need It? Image

What Is Commercial Property Insurance And Do You Need It?

December 11, 2019


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Whether you own your own building, lease your company premises or work from home, business property insurance is a necessity, and here’s why:

What is commercial property insurance?  
This insurance protects the physical assets of companies that have been affected by fire, storms, theft, vandalism and many other forms of destruction. Perils such as floods and earthquakes can be included in the coverage, but usually only if added to the policy.  

What does it cover?  
Coverage includes the building in which the company operates, everything inside the building and some items on its perimeters. These can include:  

This type of insurance protects the structure and fabric of the company premises and safeguards the owners and occupiers’ liabilities.
    
As the owner of  a commercial building, do you need commercial property insurance?
If you’re running a business from a commercial building that you own, then without adequate insurance to protect it from such events as fire, storm damage and theft, your investment could be left hanging in the balance. The IPF, or Investment Property Forum, advise that many commercial properties are especially susceptible to environmental factors that can lead to catastrophic loss or damage of the premises, such as from floods or land contamination. It goes without saying that if any equipment or machinery that is used to make your product or provide a service becomes damaged, and you don’t have the insurance to cover it, your business could very quickly be at threat.  

 Also, as the owner of the commercial building, you are liable for any injuries or damage sustained to the property by third parties, who may then go on to make claims for substantial damages if you’re found to be negligent in your duty of care.

Your duty of care - as the owner of a commercial property - is also extended to any tenants that may be using the premises, and your indemnity against any claims they may make is secured by commercial landlord’s insurance.  

You may not know that whether you use your commercial property yourself, or have leased it to tenants, you have a legal obligation to hold employer’s liability insurance, and this helps protect you from claims made by any employee (past or present), who suffers an injury because of work carried out for you.

What if you lease commercial property?
While as a tenant leasing a commercial building, your landlord is likely to have arranged building insurance, you still need to protect the contents of the building that belong to you, and this best done through commercial property insurance. Your landlord may also have arranged property owner’s liability insurance, but you may still be left liable for claims made by visitors to the premises, or from neighbours or member of the public who suffer an injury, or have their property damaged as a result of your business practices.
  
If you’re the leaseholder of the premises from which your business operates, and are employing workers, then again, you have a legal obligation to hold employer’s liability insurance to meet any claims from past or present employees.
  
So, if you own or lease a commercial property, then you will almost certainly be required to have commercial property insurance. To know more about what policies are available, talk to your local insurance experts.