Business Insurance

[Tempest]

If I was renting a retail property, what insurance would I need?

Assume that I have public liability from my trade association.

Will I need buildings and contents or just contents? and can anyone give me an approximation of what the annual cost may be as I have no idea and need a ballpark figure (eg for car insurance you are looking at £300 - £1500 depending on the car, that kind of approximation)

 

[Astaroth]

There are probably hundreds of potentially important policy types depending on exactly what your circumstances are such as buildings/ contents/ stock/ business interuption/ employers lib/ public lib/ proffessional lib/ product lib/ fidelity/ key man/ vehicle/ goods in transit/ legal expenses etc.

Many insurers and brokers however bundle these up into "small shop" or "public house" etc policies which contain the most commonly relevant risks for these types of businesses.

As to price? Next to impossible to say because there are just so many variables and the sums insured vary much more within your car example most cars fall between £1,000 and £30,000 where as a stores stock can range from £500 for a small sandwich shop to multi-million for a luxury department store.

You will need to check your contract on the property to check on liability for the building to see if you need to insurer it or not. You will certainly have some risk, which you may choose to insure, as the tenant however this can be covered by your liability insurance or you can also get tenant property insurance.

Because commercial insurance is so much more complicated than personal lines brokers still have a key role to play and whilst some direct insurers are now starting to try and break into the market it is very much at the S end of SMEs and then it is only with bundled products as previously mentioned.

 

[mountie]

Most commercial leases will specify that the tenant reimburses the landlords building insurance. Therefore, the landlord will insure the building with his/her preferred insurer and the tenant will pay back the full premium, or proportion of it if first occupied part way through the insurance year. It can be reimbursed in one lump or as an addition to the rent (monthly/quarterly), depending on the lease wording.

If the landlord only owns one building -fine. You know what you are reimbursing for. But, if the unit is part of a multi-let building (all owned by the same landlord) then an apportionment per unit has to be worked out. Again this should be worded in the lease but if not clear sort it out before signing. Apportionments can be worded differently, for example:

as a % of the overall floor area
as a % relative to RV