A business insurance policy is not only required for the property owner but also necessary for those who rent the commercial building. This is because even if the building is not yours, whatever things you keep inside the building are yours. Business insurance is a must to protect your belongings against unexpected mishaps. Besides, business insurance also reimburses for the additional expenses you incur after a covered loss, including your rent.
Let us discuss the coverages included in business insurance and how it pays for office rentals.
Property Coverage
It covers your belongings (such as computers, furniture, phone systems, electronics, etc.) that are damaged by covered perils, such as theft, vandalism, or a fire. However, damages sustained by the building due to the covered perils will be covered by your landlord’s insurance policy. For example, if your rental business location is vandalized, stolen or damaged belongings would be covered by your business insurance, and your landlord’s insurance will cover broken doors, windows, or locks.
However, some landlords may ask tenants to be responsible for damages to ACs, heaters, doors, windows, and customizations made later for business or decorative purposes. So, check your contract to see what building damages you must cover.
Liability Coverage
It protects you against third-party property damage and bodily injury caused on your property or by your work or workers. For example, liability coverage will pay for their medical bills if a customer slips on your wet floor and sustains bodily injuries. Besides, liability coverage will cover you if a third party sues you for causing physical injuries. In such circumstances, you will be covered for the costs related to the lawsuit, including attorney fees, legal costs, and settlements. Liability coverage protects you if you or your workers accidentally damage your rental building, causing financial losses.
Business Interruption Coverage
It covers lost income and additional expenses you incur after a loss resulting from a covered risk. For example, suppose a fire accident causes extensive damage to your rented office, so you cannot resume your business operations for a short period. In that case, your profit may drop, and you cannot gain new customers or clients. However, you have to pay some basic expenses like office rent, temporary relocation costs, employee wages, etc. This is where business interruption coverage can come to your rescue.
Depending on your policy type, business interruption coverage can reimburse your lost income and cover additional expenses like renting out a temporary office space, transportation, etc. It may also cover the extra amount you incur in your utility bills compared to your old office under repair or renovation. For example, if you were paying $700 for utility costs in your old location, but your new location’s utility bill costs you $1000, interruption coverage will pay the difference, which is $300.
So, business insurance won’t pay for your regular rent but will cover the costs you must pay for a temporary rental location until your existing location is repaired.
Get All-in-One Business Insurance from Locke Insurance!
Locke Insurance Group offers customized business insurance to protect your commercial building (rented, owned, or leased) and its contents against potential claims and losses. Contact us today to protect your business now and in the future.