Learn what’s covered to help you decide how much renter’s property insurance you need.
If you rent property for your business, do you need to carry business renters insurance? The short answer is often yes, because many commercial landlords require it to reduce their legal exposure.
But even if your lease doesn’t mandate renters coverage, it’s still a good idea to have it.
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Business renters insurance can help protect the business personal property of small businesses that lease space, including retail shops, offices, restaurants, gyms and more.
Depending on the coverage you buy, business renters insurance could shield you against financial losses related to:
Business renters insurance is a catch-all term that typically refers to three types of insurance:
Commercial property insurance (also known as business hazard insurance) can help repair or replace stolen or damaged business personal property, including fixtures, inventory and equipment.
It’s important to have this coverage because your landlord’s insurance normally won’t cover damage to your business property if a loss were to occur in your space. This may help protect you if you or an employee cause physical damage to your facility, or if your operations inflict damage on building walls or common areas.
If your property gets stolen or damaged, commercial property insurance could pay to repair or replace the items. Your claim payment will depend on whether you bought actual cash value coverage, which applies depreciation based on the property’s age, or replacement value, which pays for a brand new item.
General liability insurance can help protect you when someone other than an employee gets hurt at your business, or when you or one of your employees damages property that doesn’t belong to your business.
Small business owners can save up to 10% of the total premium by purchasing a coverage bundle of commercial property and general liability called a business owner’s policy (BOP insurance).
Business interruption insurance, which is included with commercial property insurance at NEXT, can reimburse you for lost income and other costs that follow a covered loss. For instance, if a fire demolishes your office, this policy could cover operating expenses while your space is under repair, and help make up for lost business income.
Even if you have personal renters insurance, it does not usually cover commercial property.
For example, say you run a small business from your garage, and a fire damages nearly all of your retail stock, shipping supplies and your computer equipment.
If you file a claim under your personal renters insurance policy, you might get partial coverage on the computer and printer if you also use them for personal reasons. But if they’re totally for business, you might be out of luck. And it’s unlikely you’d be reimbursed for any of your inventory.
For protection from the business property damage, you’d need commercial property insurance or a business owner’s policy before the fire occurred.
Yes, it usually is. In fact, it’s a common requirement in most commercial rental agreements or leases.
At a minimum, commercial landlords want their tenants to have general liability insurance. Why?
It can help protect the landlord from being sued by someone who gets hurt in a tenant’s space if the small business owner was uninsured. By requiring tenants to have liability protection, landlords try to make sure the tenant’s insurance provides protection.
Landlords and property managers can sometimes mandate that their tenants have other forms of insurance as well, such as:
They want their tenants to have insurance to make sure they can keep paying their monthly rent. Without insurance, tenants might have to divert revenue to pay for property damage or legal expenses instead of paying their rent on time.
If you own your commercial building, you won’t have a landlord telling you to buy insurance. However, you’ll still need insurance to protect your investment in the property. Many property owners purchase:
The cost of commercial property insurance depends on your particular circumstances. Insurers will look at the type of work you do, if you have employees, the state where you operate, claims history, work experience and more to determine your premium.
NEXT provides commercial property insurance tailored to your line of work. We also offer general liability insurance tailored to many types of small businesses. You can combine these two types of insurance together to get BOP coverage.
If you bundle multiple coverages with NEXT, you can usually save around 10% on your total insurance costs.
Getting business renters insurance to meet your landlord’s requirements is fast, easy and affordable at NEXT.
Apply for coverage, get a quote, see your options and buy online in less than 10 minutes.
As soon as you purchase, you can access your certificate of insurance to send proof to your landlord. And you can easily list an additional insured on your policy.
If you have questions, our licensed U.S.-based insurance professionals are ready to help.
Start a free quote with NEXT today.
