Compare commercial property insurance

Compare commercial property insurance

Are you the landlord of a business premises? You’ll need to think about commercial property insurance. Here’s the lowdown.

Do I need commercial property insurance?

If you own a building that a business operates from, it’s deemed a business premises. Shops, offices, restaurants, showrooms and clinics are all examples of commercial property. 

You’ll need to protect the bricks and mortar of your building to keep your income safe. That’s where commercial property insurance comes in. It covers you for unexpected damage to the premises, which could cost you a fortune to put right if you had to pay for the repairs yourself. 

Here’s a few examples of when commercial property insurance could prove useful: 

  • An overnight fire damages a bakery, which needs extensive repairs to get it up and running again.
  • Freezing temperatures cause a pipe in a warehouse to burst, resulting in a flood that damages the floor.
  • Burglars smash windows during an attempted break-in, which will need to be replaced.

What does commercial property insurance cover?

Like regular home insurance, there are two types of commercial property cover – buildings insurance and contents insurance.

Buildings insurance will cover the rebuild or repair costs of the building itself. It offers protection in the event of:

  • burst pipes
  • flood
  • fire
  • riots
  • storms
  • subsidence
  • theft

To work out how much to insure your building for, you can use the Building Cost Information Service.

Business contents insurance covers what’s inside the building - equipment or stock for example. 

If you’re a landlord, contents cover will be your tenant’s responsibility. But, depending on the type of building you’re renting out, you may have supplied furniture or appliances that belong to you. With commercial property insurance, you can opt to protect these too.

What’s not covered by commercial property insurance? 

You should check your policy carefully to see exactly what you’re covered for and what’s excluded, but there’s a few common exceptions. 

Normally, commercial buildings insurance won’t cover you for: 

  • General wear and tear. Most insurance providers won’t pay out for repairs or replacements if the damage was caused by normal use over time or because of poor maintenance.
  • Poor craftmanship. Most policies won’t cover you for damage caused by shoddy repairs or low-quality workmanship, so it’s important to always use a trusted tradesperson and check their work. DIY fixes may save money in the short term, but they could invalidate your claim and cost you more in the long run.
  • Unoccupied properties. Most policies will be invalidated if your property is left empty for a certain amount of time, typically 30 days or more. If you know your property will be vacant for a while, you should think about unoccupied property insurance instead.
  • Damage caused by pests or animals. Many policies have exclusions for damage caused by rats and other vermin, insects, and even domestic pets (so be careful if you allow ‘bring your pet to work days’).

What other business insurance do I need? 

You can tailor your insurance package to fit your needs. Depending on your business, you might find the following cover useful:

Property owner’s liability insurance: this could pay out if a tenant or visitor is injured on your property, or their property damaged, and they seek compensation. For example, if they trip over a step and seriously hurt themselves. 

Accidental damage cover: this offers cover if your tenants accidentally damage your building or contents – if someone knocks a hole in the wall when putting up a shelf, for example. 

Commercial landlord contents cover: this could cover any contents in the building that belong to you. 

Employers’ liability insurance: required by law if you have any employees who are not close family members.

Frequently asked questions

Is commercial property insurance a legal requirement?

No, you’re not required by law to have commercial buildings insurance. It makes sense to have it though, to cover you for costly repairs or rebuild works caused by fire, flooding or storm damage, as well as theft and vandalism.

And even though it’s not legally required, mortgage lenders will often insist that you have commercial property insurance as one of the conditions of the loan, to protect their investment.

Do I need buildings insurance if I don’t have a mortgage?

If you own the building outright, you still aren’t legally required to have buildings insurance, but it’s still a good idea. Having to rebuild from the ground up following a catastrophe would set you back financially.

What if my tenants leave? Can I get protection?

If something happens and your tenants can no longer rent your building from you, you’ll lose valuable income. One solution could be to add business interruption insurance to your commercial property insurance.

What if my building’s damaged and the tenants can no longer work there?

You can add rental income protection insurance to your policy to cater for such a situation. This will compensate you for loss of rent if your tenants can no longer work in the building because of fire or flood damage. However, it won’t cover loss of income if your tenants default on their rent.

Can I get mixed commercial and residential landlord insurance?

Yes, you can choose a policy that combines both commercial and residential tenancies. This can be handy if you own a shop with a flat above it.

Do I need commercial insurance if I run my business from home?

If you run a home-based business, your home insurance policy should cover the building. If you store specialist equipment at home or have clients visiting your property, you may need home business insurance too.

How much does commercial property insurance cost?

The cost of commercial property insurance varies a lot and depends on several factors, including:

  • the age of the property and the types of locks and other security measures in place
  • the industry you work in
  • the level of cover you need

Other factors include:

  • The commercial property you own and whether it’s in an area prone to flooding, or if it’s a listed building that would be harder to repair.
  • The number of properties you want to insure.
  • Your claims history. If you’ve claimed on your commercial property insurance before.

It’s a good idea to compare different quotes for commercial property insurance, to find the right deal for you. That’s where we come in. We compare quotes from leading business insurance providers to help you find cover that’s right for you.

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What do I need to get a quote?

We’ll need to ask you a few questions before we can start comparing business insurance quotes for you. That’s so we can help you find the right cover for your needs.

We need to know:

  • What trade or business the commercial property is being used for
  • If you have any employees, or if you use any casual workers or contractors
  • The level of cover you need for property owners’ liability
  • Any extra cover you need, for example rental income protection (business interruption) or commercial vehicle insurance.
  • Your claims history and if you’re involved in any ongoing disputes

Also, we’ll need a few personal details. If you’ve compared with us before, we can fill those in for you.

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Why use Compare the Market?

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**On average, it can take less than 6 minutes to complete a business insurance quote through Compare the Market based on data in November 2020.

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Emily Kindness

From the Business team

What our expert says

“Business premises have different considerations to residential properties, like people on site and occupational hazards, so it’s important to have the right cover in place. Commercial property insurance can help cover you for costly repairs if your building is damaged by fire, flooding or storms, so you can get back to business as soon as possible.”