Commercial property insurance

If you own your commercial property, you’ll be responsible for paying buildings insurance.  

If you rent your commercial property, buildings insurance will be the landlord’s responsibility. 

If your commercial property insurance claim has been rejected, the first step is to check your policy documents. Then talk to your insurance provider, as it must give you a reason for denying your claim.  

If it doesn’t respond within eight weeks, or you’re unhappy with its response, you can contact the Financial Ombudsman for help. 

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

Mortgage lenders may also insist you have commercial property insurance as one of the conditions of their loan, to protect their investment. 

If you own the building outright, you 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.

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 landlord buildings insurance. This could cover loss of income while your commercial property is in an ‘unfit’ state and can’t be rented out.

You can add rental income protection insurance to your commercial landlord insurance 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.

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.

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 a home business insurance policy that includes public liability cover.

Yes, you can get commercial buildings insurance for an old building, but you might pay more for your premiums. Older buildings with outdated electric and plumbing systems may be more susceptible to damage, and therefore pose a higher risk.  

Listed buildings, in particular, may be more difficult and expensive to insure due to their old and precious status. Materials may be expensive to source and specialist tradespeople may be needed to carry out repairs.  

Depending on the age of your commercial building and its risk profile, you may need to seek out specialist insurance for non-standard properties.