Commercial property insurance

Though it’s not required by law, some mortgage lenders will insist you have it before they let you take out a loan. So, if you’re looking for a commercial mortgage, you might want to bear this in mind.

And although it’s not a legal requirement, having insurance can really help with the costs of repairs and replacements if something goes wrong at one of your properties.

It’s the responsibility of the building owner to have the right insurance in place.

However if you let your property, you can charge your tenants for the insurance costs as part of their lease agreement.

As the owner of a commercial property, it’s likely that any repair costs will fall on you. And while replacing a broken window may only set you back a few hundred pounds, if your business had to close due to major repair work, you could lose significantly more.

That’s where commercial property insurance can really help. Not only will it cover repair work, but it covers the consequences of closing shop. For example, you’ll be covered for any loss of rent if your property is rented by a business. You’ll also be covered for any legal expenses if you’re taken to court over contract disputes or employment issues.

As your policy is bespoke to your needs, what you can expect to pay will depend on a few factors:

• The properties you want to insure (including the type, size, location and how many there are)
• The risk level of the premises (we’ll conduct an assessment that looks at your risk of theft, flood and subsidence)
• Occupancy (if you have tenants, if the premises is shared and if it’s residential or commercial)
• Your chosen level of cover (you can choose your cover value for public liability and more)
• If you add optional extras to your policy for a cost (such as excess protect)

Yes, you can. Most insurance policies allow up to 30 days of unoccupancy on a property with the potential to extend this if needed.

There are some cases where your property may be unoccupied for much longer. For example, if you’re renovating or in-between tenants. If you find yourself in this situation, we can find you bespoke unoccupied property insurance, which will usually cover you from two to twelve months.

Theft cover is included if you have contents cover as part of your policy. If you opt for just buildings cover, you’ll only be covered for any structural damage caused by theft or a break-in. You may also be covered if your keys to the property are stolen.

Yes, commercial property insurance is classed as an allowable expense by HM Revenue and Customs (HMRC), meaning it’s tax deductible. You can discuss this in more detail with your accountant.

Tax treatment depends upon your individual circumstances and may be subject to change in the future.

Commercial property insurance protects properties that serve as a working environment, like offices and workshops. These properties are typically constructed differently to residential properties and have more complex amenities. For example, they could be made of steel and concrete, with complicated electrical systems and heating.

Landlord insurance on the other hand covers residential properties. These are usually bricks and mortar buildings with live-in tenants.

Both the build and how the property is used affect the risks you might face as the property owner. That’s why it’s important to have the right policy for your property.