As a landlord, you need to be insured for more than just the bricks and mortar of the building itself. Tangible things such as the contents of the building also need coverage, as do risks such as personal injury and loss of income usually generated by the property. Here’s what you need to know about the insurable risks of commercial property ownership, ultimately protecting you as the owner against financial loss.
Damage to the building
As the owner of the building you need to insure the building for perils such as storm, fire, flood, and escape of water. Coverage depends on whether 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 as the owner on the reinstatement value, so here are factors to consider:
- What would it cost to demolish?
- What would it cost to clear out the site, including stabilising neighbouring properties if attached?
- What would it cost to reinstate the building to its current state, including all fixtures and fittings originally supplied. Anything fixed to the building and supplied by the landlord (for example fitted kitchens or salon washbasins) need to be taken into account when estimating your sum insured.
Loss of contents
Although you may not own all the contents or stock in the property, you probably own some items such as shelving or furniture. Many landlords fit out shops for their tenants, and if this is the case for you anything that isn’t fixed but is 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 ‘insurable interest’ which means they can’t insure what they don’t own.
Interruption in rental income
Landlords rely on the income from renting their properties to keep the books balanced. If the building is not fit for purpose due to an insurable peril – for example a storm destroys the roof making it uninhabitable for its commercial use – the insurance company in Ireland will cover the loss of rent from the property. This usually is for a maximum period of 12 months, though policies vary so do check your policy wording.
Property Owner’s 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.
This is a liability that many landlords don’t realise 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. Therefore, when they are in and working on the premises, if an incident was to occur the claim would be against your employer’s liability. A lot of commercial landlords underestimate their employer’s liability, so ensure 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.
What additional cover is included?
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 is another extra, as a lot of commercial properties contain more glass than a standard house. Some insurers automatically cover glass breakage to a specified amount.
Levels of coverage and additional coverage differs from policy to policy so please check your quotation or policy wording to make sure that you have ample cover. The best way to get the commercial property insurance you need is to speak to an experienced broker. At Britton Insurance we offer great value for Landlord Insurance in Ireland. Our quotation systems are designed to filter and search for the best value prices available to us for each customer’s specific needs when they are looking for Business Landlord Insurance.