Commercial real estate insurance
Owning a commercial unit or building is a good investment but also comes with its own risks. With commercial properties housing different types of businesses and operations, the risk of an accident increases exponentially. With high foot traffic from tenants, customers and visitors, the risks of an injury or damage to property is increasingly common and you need to make sure that you have the right protection in place.
What insurance do Commercial Landlords need?
Whether you own a commercial condo, building, warehouse or something else you’re renting, you need insurance to protect your assets. As with any business, regardless of its size or operations, the insurance to have is almost always a commercial general liability (CGL) policy because it protects the business and any third party if the business directly causes harm and is sued.
What does CGL cover?
Property damage and bodily injury – this coverage pays for legal costs if the business is found to be legally responsible for a third party’s bodily injury such as a slip and fall, or damage to their property such as if a customers’ vehicle was damaged by an .
Personal injury – this coverage pays for legal costs if the business is found to be legally responsible for harm to reputation such as slander or libel.
Tenants’ Legal Liability – this coverage applies to premises rented by the business and pays the landlord for damage to the unit caused by a covered event. If you also rent space for your business, this coverage is required by your landlord.
Medical payments – this coverage helps pay for a third party’s medical bills if they were injured due to your business operations.
What other insurance should commercial property owners have?
A commercial policy package is often available from insurance providers that bundles a number of coverages (in addition to CGL) that most businesses need.
Here are some coverages available. You may need additional or other types of coverage depending on your operations.
Equipment breakdown
Not all policies cover a building’s systems such as electrical, heating, boiler and air conditioning. If any of these systems break down, you and your tenants could be left in the dark without power, heating, cooling or water for days, resulting in a major repair bill and lost rental income. Equipment breakdown insurance is a key coverage to have because it covers the sudden and accidental breakdown of the systems that are vital to operations, which are not covered in your property policy.
For example, you rent your commercial unit to a coffee shop and the unit’s electrical system broke down, causing a power outage and major repairs were required. Your equipment breakdown insurance would cover the repair of the unit’s electrical system. If your tenant also has this type of insurance, the damage caused by the break down to their own equipment would be covered by their policy.
Commercial property
A broad coverage that protects the business’s physical assets such as:
- Real property – covers the building and other structures within the property or premises.
- Equipment such as computers, office furniture and more.
Loss of rental income
This coverage pays for loss of rental income until your property has been repaired or replaced.
Cyber liability
Covers the costs of restoring data, legal action, investigation and remediation in the event of a cyberattack or data breach.
Simple or complex business insurance needs? A broker is the best way forward.
It’s best to seek the advice of a licensed commercial broker and discuss your business operations to get the right insurance solution. As your business grows, your coverage needs also grow – an insurance broker can assess and maintain your policy to help ensure you have protection in place.
At McClelland Insurance, our brokers have the expertise and experience in various industries and will work with you to provide the best available coverage that’s tailored for your business.
Ready to get coverage or have more questions?
Visit our commercial insurance page
to learn more about insurance for commercial property owners.
The content on this page is for information only. The insurance products described are subject to terms, conditions, limitations and exclusions that are outlined in the policy wording. Please refer to the policy wording for complete details.