When letting out a commercial property, some landlords assume that if a tenant holds business insurance, it covers all risks. In reality, commercial landlord insurance and tenant business insurance serve different purposes. Knowing where the responsibilities lie helps property owners avoid gaps in financial protection.
Below, we explain what commercial landlord insurance is designed to cover, where tenant business cover stops, and why reviewing the type of cover you hold is essential.
What Is Commercial Landlord Insurance?
Commercial landlord insurance is designed to protect the property owner, not the tenant’s business. This could apply to:
- Shops
- Restaurants
- Offices
- Warehouses
- Industrial premises
It helps cover the landlord’s risks, including buildings insurance, property owners’ liability, and loss of rent cover if the building becomes unusable.
What Does Commercial Landlord Insurance Cover That Tenant Business Insurance Does Not?
Tenant professional service insurance usually focuses on:
- Business stock and equipment
- Public liability linked to their activities
- Employers’ liability if they have staff
- Professional indemnity insurance cover for advice or services
However, the tenant’s cover does not protect the actual building or the landlord’s responsibilities. Key areas where commercial landlord insurance offers protection include:
1. Buildings Insurance
If there is a fire, flood, or storm damage, commercial landlord insurance can cover:
- Rebuilding costs
- Structural repairs
- Fixtures and fittings owned by the landlord
Tenant cover would not apply to these areas.
2. Loss of Rent Cover
Should the premises become unfit for use, such as after a fire, loss of rent insurance could help recover rental income for the landlord during the repair period. The tenant’s policy would not include this, as it is the landlord’s financial interest.
3. Property Owners’ Liability
If someone is injured due to the building’s structure, such as a loose tile or faulty step, public liability insurance linked to the landlord protects against:
- Compensation claims
- Legal actions
- Medical costs
The tenant’s liability policy would not apply in these cases if the incident is linked to the fabric of the building.
Why Landlords Could Be at Risk Without Cover
If a landlord relies on a tenant’s business insurance alone, they could face a wide range of risks, including:
- Paying for major repairs after fire or flood
- Covering legal fees from public liability claims
- Losing rental income with no compensation
Even where a tenant has strong cover, they are not responsible for the landlord’s property interests. Arranging the right level of cover ensures that a landlord’s personal liability and property value are protected.
Which Landlords May Need This Type of Cover?
We help arrange commercial landlord insurance for:
- Sole traders letting business premises
- Limited companies holding property portfolios
- Individual property investors
Whether it is a single retail unit or several office spaces, the need for clear protection applies in both small and larger setups.
Choosing the Right Insurance for Peace of Mind
We support landlords in reviewing:
- The amount of cover needed for rebuilding values
- Whether loss of rent cover is included
- The correct limits for property owners’ liability
By arranging tailored insurance offers, landlords can help ensure that both their property and financial interests remain covered, even if a tenant holds their own business policy.