Commercial Landlord Insurance: Guide to Safeguarding Your Assets
With rebuild costs and premiums rising, Strettons shares practical steps to make sure a commercial landlord's policy pays out when it is needed:
• Check the rebuild cost: get a Reinstatement Cost Assessment from a building surveyor, ideally every three years. If a building is underinsured by 50%, an insurer may cut a claim by 50%. RICS reports that many UK commercial properties are underinsured, with average shortfalls of 61%.
• Keep insurers informed: tell them about any change in how a tenant uses the property, or any sub-letting. An insurer that was not told can reduce or refuse a claim.
• Inspect empty units: most policies require weekly visits. Without them, a small leak can go unnoticed for weeks and the cover may be at risk.
• Secure vacant property: drain the system or keep the heating on to stop pipes freezing, secure letterboxes, clear rubbish that could be a fire risk, and consider extra security against squatters and break-ins.
• Restaurants and kitchens: policies often carry kitchen conditions. If a tenant does deep-fat frying, the insurer must know, or a claim may be declined.
• Property Owner's Liability: this covers injuries to third parties for which the landlord is found responsible, such as a trip on a loose carpet or a falling roof tile. Many policies start at £2m or £5m; Strettons' own policy offers a standard £10m limit.
Strettons' property management and insurance teams work together on the risks of the buildings they manage, and offer to review policies for hidden conditions.
