Your landlord’s policy doesn’t include your business

Key takeaways:

  • Your landlord’s insurance doesn’t cover your business’s assets.
  • You need commercial renter’s insurance and business liability coverage.
  • You might also want to consider additional protection for things like natural disasters and vehicle coverage, as well as business interruption insurance.

If your business is like most others in the U.S., you don’t own the building where your business operates. Also, if you’re like most business owners, there’s some confusion over what type of insurance you need to protect your enterprise. Your new landlord has insurance, but it is designed to protect their assets, not yours. 

Plus, your landlord probably requires you to have certain types of insurance and they may require you purchase a policy before you sign the lease agreement. 

Let’s clear up the confusion so you know what insurance coverage is likely required, who is liable for what, and what types of coverage you may not even be thinking about.

What your landlord’s insurance covers

Landlords typically have two types of insurance: liability and property coverage. 

  • Commercial landlord liability insurance protects the landlord against claims from personal injury or personal property damage. This includes injuries that result from things like slipping and falling on wet surfaces or because of a damaged parking lot surface, sidewalk, stairs, and other parts of the property.

This insurance does not give liability protection to tenants

  • Commercial landlord property insurance provides coverage for the actual building and its surroundings. This policy includes coverage for fire, wind, hail, tornadoes, vandalism, theft of business assets (but not cash). In Florida, it is likely that the landlord also has additional coverage for hurricanes and floods. 

This insurance covers the building you are in and damage to that building, but it does not cover damage to your personal property. 

You need commercial renters insurance to protect your business

Commercial renter’s insurance protects you from losses if there’s a major damage incident, such as a fire. Before you move into your new location, make sure you have the following coverage:

General business liability insurance

You’ll probably see this type of coverage mentioned in your lease because it is usually a requirement for a commercial lease. It helps pay for any damage or injuries incurred by a customer or fellow tenant. It is especially important if you have a retail business with people frequently going in and out. 

General business liability insurance covers:

  • Bodily injury and medical expenses for the injured party
  • Damage to someone else’s property
  • Libel and copyright infringement, also known as “advertising injuries.” 

This coverage is important to protect you from lawsuits, and while your landlord’s policy offers protection from things that happen outside your business, it doesn’t protect you if someone falls or is otherwise injured inside your establishment.

Commercial property insurance

Since the landlord’s policy doesn’t cover your personal business property, you’ll need commercial property insurance.

This type of insurance helps pay to repair or replace the business property that has been damaged, destroyed, or stolen and covers the interior of the physical location of your business, as well as other assets, like equipment.

Remember – your landlord’s insurance only covers the overall building, not what’s inside your space, so if there’s a fire inside your retail store, you are responsible for all damages, as well as damages to the units of any other tenants. Your tenant commercial property insurance covers: 

  • Damage from “named perils” that include fire, theft, vandalism, and wind damage, as well as burglaries. It doesn’t cover what’s considered normal wear and tear or natural disasters.
  • Business contents that include:
    • Office supplies like pens, calculators, and tape dispensers
    • Furniture, including chairs, desks, and conference tables
    • Furnishings such as area rugs, blinds, and other window treatments
    • Computers; this includes desktops and laptops
    • Electronics, including mobile phones and tablets
    • Heavy equipment such as forklifts
    • Machinery, including photocopiers and 3D printers
    • Anything else that’s movable

It’s important to note that tenant commercial property insurance only covers the business personal property that is kept at a specific location. If you have storage space or keep assets in your garage at home, the policy can be extended to cover these items, so let your insurance agent know. 

Some other type of coverage you might want to consider

Since your landlord’s policy doesn’t cover your assets, you might want to consider additional coverage for added protection and your agent can modify your policy to cover these additional risks that include:

  • Natural disasters like floods and hurricanes.
  • Business interruption. If your business has to temporarily close because of property damage, this policy replaces lost income.
  • Inland marine. If your business moves things like tools and equipment from place to place, ask about this type of policy. It also covers items in your temporary care.
  • Commercial auto insurance. Your business property insurance doesn’t cover your business vehicles, so you’ll need commercial auto insurance. If you use your personal vehicle for deliveries or to visit clients, ask your agent about a hired and non-owned insurance policy, which covers leased and rented vehicles, and personal vehicles owned by both you and your employees. 

You took that leap and took a risk to be an entrepreneur and you’d hate to lose it all. Protect that business you worked so hard to build with the proper insurance.

At Avante, you’ll get the protection you need for your business

Avante is a family-owned insurance agency and we understand the challenges of keeping a small business growing and thriving. 

Our team will work with you to find exactly the right blend of insurance products for your unique business and place you with the company that offers not only the best coverage, but the best rate. 

Contact us today – we’ll make sure your business is protected now and into the future. We’re Avante and we’re always standing by. 

This blog and website are made available by the publisher for educational and informational purposes only. It is not to be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state.