When you own a building that is intended for commercial use whether it is occupied as one commercial space, a multitude of businesses, mixed residential or unoccupied…that building is your responsibility as landlord to insure.
Commercial Property Insurance doesn’t just cover the building but your insurable risks within it. For example, are you aware that if a member of the public gets injured by a fixture or fitting on the building or supplied by you then you as the landlord is financially liable?
Commercial Property Owners Insurance protects you the owner against financial risks associated with the building.
1. The Building
As the owner of the building you need to insure the building for perils such as storm, fire, flood, escape of water etc please note if the property is mixed use with unoccupied areas or fully unoccupied the general cover may decrease for unoccupied sections to Fire, Lightening, Explosion and Aircraft cover only.
The building sum insured should be calculated by you the owner on the reinstatement value, so here are factors to consider:
- How much it would take to demolish?
- How much would it be to clear out the site, including stabilising neighbouring properties if attached?
- Calculate how much to reinstate to its current state including all fixtures and fittings originally supplied.
Anything that is fixed to the building and supplied by the landlord should be taken into consideration when estimating your building sum insured.
For example, a fit out that is fixed to the property i.e. a premises fitted out by the landlord for a salon with washbasins etc then these fixed fittings come under the buildings sum insured.
2. The Contents
Although you may not own all the contents or stock in the property you probably do own some contents like shelving or furniture. Many landlords provide shop fits for their tenants, if this is the case anything that isn’t fixed and supplied by you is considered your contents and therefore your responsibility to insure. You might think it would be cheaper for you to get the tenant to insure this but they don’t have what’s called in the industry insurable interest which means they can’t insure what they don’t own.
3. Rental Income
If the building is not fit for purpose due to an insurable peril for example a storm destroys the roof making it unhabitable for its commercial use the insurance company in Ireland will cover the loss of rent from the property for usually 12 months though policies vary so check your policy wording.
4. Property Owners Liability
This is similar to public liability only stated on most policies as property owners liability. This covers you for any incidents regarding the public and your property that’s under your control. For example, if a slate from the roof falls and injures a passer-by due to a storm this falls under the property owner’s liability.
5. Employers Liability
This is a liability that many landlords don’t register that they require. If you hire someone to carry out any form of maintenance on the property for example an electrician to deal with a fault, they are your employee as the property owner and therefore when in and working on the premises if an incident was to occur it would be off your employers liability that they will be claiming. A lot of commercial landlords underestimate their employers liability, please make sure that you allocate enough estimated wages as insurers will only cover you for the notified amount and can leave you with an averaged out settlement and a hefty bill.
6. Additional Covers – Automatically Added
Some property owners’ policies include additional extras such as fire brigade charges. If you are unfortunate to have a fire at your premises this insurance will cover you for a set amount for the fire brigade to attend.
Glass Cover – a lot of commercial properties contain more glass than a standard house. Some insurers automatically cover glass breakage to a specified amount. Again, this is set sum and something that differs from policy to policy so please check your quotation or policy wording to make sure that you have ample cover.