Small business owners who rent the property where their business is located should consider business renter's insurance. This term refers to several insurance policies that protect commercial renters.
If you rent your business property, your landlord’s insurance would be of little help to you in case of a fire, a storm, or similar property damage. It also wouldn’t protect you from lawsuits.
Most landlords have property insurance that covers their buildings and their own property. This property coverage insures landlords against fire, theft, and similar risks. Landlords will also carry building insurance, which covers any buildings, structures, and completed additions that they lease to commercial tenants.
In addition, landlords usually obtain lessor's risk only insurance, which protects against lawsuits over property damage and injury.
While these policies provide protection for landlords, it does not protect your own business within that building. That’s why most small business owners buy what’s known as business renter's insurance.
This term refers to several types of business insurance that protect business owners from their risks in a rented space. One example is a business owner's policy (BOP), which bundles property and liability coverage at a discount.
Sometimes renter's insurance is required. Landlords usually require commercial property insurance for their business tenants, which covers the repair or replacement of your business property if it’s lost, damaged, or stolen.
With business renter's insurance, you will have the option to insure your business property for its replacement value or its actual cash value.
It’s similar to the renter’s insurance that many apartment occupants have. It covers your business property in case of:
Imagine if a windstorm tore the roof off your building and damaged your retail store. Your landlord’s insurance would help you repair or replace the roof, but it wouldn’t cover any of your property.
Your commercial property insurance policy could cover the loss of your computers, furniture, inventory, and other business items if you file a claim with your insurance company.
If a fire damages or destroys the building where you run your cleaning business, your landlord’s insurance would cover the building itself. Your commercial property insurance would cover the cost of replacing your cleaning equipment and supplies.
This is one of the reasons so many property owners require their business tenants to have insurance. It keeps their tenants financially protected in case of a mishap, so that the tenant can financially recover and continue paying rent.
In addition to commercial property insurance, many small business owners buy a general liability policy, which covers common business risks.
General liability insurance covers a variety of business risks, such as:
Even a minor slip-and-fall accident at your business could result in significant costs, with expensive medical bills and legal fees.
For example, clothing stores and restaurants are going to have higher general liability costs, mainly because stores and restaurants have higher foot traffic than other businesses.
If you need business liability insurance and property insurance, you might consider a business owner’s policy. It combines general liability and commercial property insurance in one policy, and is usually less expensive than buying them separately.
You can also add business interruption insurance, which protects your business income against the costs of a temporary closure. For example, if your business closes for renovation following a fire or other covered loss, this policy covers your lost revenue, employee pay, and day-to-day expenses.
It’s a good idea to check with your landlord and your lease agreement to see what kind of insurance you’re required to have, and what your landlord’s insurance would cover in case of a claim. This way you can make sure you have the right business insurance coverage in case of a mishap.
Business property insurance costs are fairly inexpensive, however, bundling it with general liability in a business owner's policy would help you save money. The average cost of a BOP is $99 per month.
The cost of business renter's insurance is based on a few factors, including:
It's easy to get a business owner's policy or other business renter's insurance policies if you have your company information on hand. Our application will ask for basic facts about your business, such as revenue and number of employees. You can get a quote, buy a policy online, and get a certificate of insurance with Insureon in three easy steps:
Insureon's licensed insurance agents work with top-rated U.S. providers to find the right insurance coverage for your small business.