Insurance for Commercial Tenants
Business insurance provides security and peace of mind but particularly in the case of a new businesses insurance can represent a significant cost at a time when funds may be short - don't be tempted to skimp on your insurance.
Property Insurance, if you are renting your property, is usually arranged and paid for by the landlord in the first instance. As tenant you will be required to pay your landlord for this annual cost, perhaps as part of your annual service charges.
You should ask your landlord to see a copy of the insurance policy and the risks covered. Normally this will cover the building against specified risks or a whole package (all risks) and may in addition cover things like terrorist attack, vandalism and wilful damage.
Remember the insurance the landlord arranges will not cover tenant's contents, stock etc. If you have items of particular value you may have to check with the landlord's and your own insurers to make sure you are properly covered.
Remember also, if the landlord does not cover the building for its full replacement value (periodic valuations needed) you could find there is a shortfall upon making a claim. Who pays if there is a shortfall - landlord or tenant? This is one point to clarify at the outset of the tenancy.
In general businesses have legal obligations to three distinct groups of people:
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Employees
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Customers
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The Public
You must by law take out employers' liability insurance which covers employees, trainees, casual and contract staff for a minimum amount of cover and you must display a current Certificate of Employers' Liability in your place of business.
You must by law have insurance covering all road vehicles for a minimum of third party liability.
Legal liability insurance is not a legal requirement but these days with claims becoming more common legal liability insurance is an absolute necessity.
Public Liability will ensure that you are covered against accidents to the general public cause through your business activities.
Product Liability covers you against injuries or other damage caused by faulty goods made, repaired, installed or sold by you.
Never rely totally on this information which relates primarily to England & Wales. Before taking action or not, seek expert advice with the full facts of your case and all documents to hand.
