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Commercial Renters Insurance: Does Your Small Business Need It?

When you rent or lease a commercial office, you’re responsible for the property you use or store in that space. Most commercial lease agreements will also hold you responsible for any damage caused to the property you rent.

If you operate your small business in leased office space, you may want to invest in commercial renters insurance (also known as business renters insurance or business owners policy) to protect you and your business from circumstances beyond your control.

While some landlords and property owners mandate that their tenants purchase renters insurance, others leave it to their tenants to decide. From a liability standpoint, commercial renters insurance is a worthwhile business expense that provides invaluable peace of mind.

What is commercial renters insurance?

Commercial renters insurance covers three primary areas: casualty, liability, and property (see sidebar for common definitions). And according to an article posted to the American Express Open Forum, “small business owners who forego renters insurance are leaving themselves vulnerable to theft, natural disasters, and ultimately – the loss of everything in [their office].”

The type and amount of insurance your business needs (or landlord requires) will depend upon several factors, including the number of people you employ and the equipment or assets you store onsite. Policy prices will vary depending on your insurance carrier and the coverage needs of your small business. While the cost will vary by insurance company, you should be able to find good coverage for under $1,000 a year.

But where do you start?

Step 1: Talk to your landlord

Find out what your landlord’s insurance policy covers in your office space and how that policy affects your liability and business assets. A well-drafted lease agreement will clearly state the type of insurance your landlord has, how or if it covers your business, and insurance requirements for tenants. Don’t assume that your landlord’s insurance will completely cover your business and property. If you have questions or concerns, get them answered before you sign a lease so you can make sure your policy covers anything your landlord’s policy doesn’t.

Step 2: Do your research

You can get a sense for policy types and costs by conducting your own research online can check with your insurance carrier for rates, but. A quick Google search will net dozens of potential carriers offering standard packaged policies, as well as policies that can be tailored to meet your specific business needs.

Step 3: Buy. Carefully.

What policy is best? Only you and your agent can determine that. Show your agent a copy of your lease, as well as a list of your coverage questions and concerns. Your agent should be well qualified to recommend the right policy for you and your business—whether it entails property coverage, liability coverage, commercial auto coverage, or anything and everything in between.

You worked hard to build your business; your commercial renters insurance should work hard to protect it.


Have questions about commercial renters insurance for your leased office space? The Anderson Group can help. Contact Susan Touhey at 518-458-7726 or stouhey@tagny.com.


Don’t let commercial insurance terms intimidate you. Here’s a quick guide to some of the most popular policy coverage.

  • Property and building coverage: Covers damage you, your guests or employees do to your business rental property. Also covers losses related to your belongings, land, and buildings and is often combined with casualty insurance.
  • General liability coverage: Protects your business if someone gets injured or experiences property damage in the course of doing business with you.
  • Casualty coverage: Protects you if someone gets injured on your business property and/or if there are crimes against your property.
  • Business asset and equipment coverage: Covers you if a piece of equipment you own causes damage to the business property you rent.
  • Loss of production coverage: Protects you in the event of a disaster that prohibits you from conducting business in your rental space, including equipment replacement/repair and relocation costs.
  • Crime and theft coverage: Protects you from damage or loss as a result of a break-in at your business.
  • “Valuable data” coverage: Covers data lost in fires, floods, or other disasters.

 

 

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