Here at Boxpod, we see it is our job to be to match a business looking for a new commercial unit, with commercial unit landlords across the UK. As the tenant in a new commercial unit, there are many things that you need to consider. Some of these would include the way that the unit is set out, how it would work best for your business, how it would look, and how it would accommodate your needs in the best way.
Then there are the more ‘administrative’ aspects – ensuring that your waste is taken away on a regular basis, dealing with water and electricity, and, of course, insurance.
Insurance is important in many aspects of our lives. From cars to houses, anything that can be damaged or go wrong, and which can have potentially high-cost consequences should normally be insured – especially when it comes to business. Insurance might not just be for the object(s) that is damaged or lost, but also potentially for the impact that it has on your business. After all, should something happen that means that you cannot run your business, you could be in trouble!
It can be difficult to know which insurance you need when you are renting a commercial unit, to ensure that your business is secure. Unlike if you own your own commercial unit, when you know that you are responsible for everything when you rent your premises from a landlord, things are not often quite so obvious.
In this article, we are going to look at the different insurance that is available to businesses, and what you should be considering taking out if you are renting a commercial unit from a landlord.
Buildings Insurance
Buildings insurance relates to the physical building that you are leasing from a commercial landlord. It covers any issues about the building and its structure, including when there is damage due to natural disasters such as floods and storms, as well as fire or damage to floors, roofs, and walls.
It is normally the case that the landlord takes out the buildings insurance and this is covered under your lease – especially if you have a fixed-term lease. It is important, however, that when you are negotiating your lease with the commercial landlord, you establish whether the buildings insurance is included in your rental payment or whether you will be getting a second bill for it.
Contents Insurance
Although the building in which your business is housed might be insured, the things that you have inside it, are not included in this. For many businesses, these can be expensive assets from computers to manufacturing machines, stock and supplies, forklift trucks, or furniture. And the answer is contents insurance.
It is normally the case that you (the tenant) would get your own contents insurance. This would mean that breakages, damages, or theft would normally be covered (according to the terms of your insurance) and your business would be protected should anything happen to the contents of your commercial unit.
When it comes to contents insurance for a business, it is essential that you declare the right value of the contents to ensure that the insurance policy covers all of the elements of your contents in case something happens. You may also have exclusions in your contents insurance policy, and it is important to double-check these so that you know what is and is not included.
Another important aspect of contents insurance is to check whether the payout for lost or damaged items is of the value of replacing them with new equivalents, or whether the payout is the cash value that factors in depreciation.
Tenants Improvement Insurance
Whether you are a domestic resident or a commercial unit tenant, most people like to make a few changes to the interior of the property. This might be putting up temporary walls, mezzanine, redecorating, kitchen units, or making other ‘improvements’ to the building.
Tenant’s improvements insurance covers these changes that you have made should something happen to them, as these will not be covered by your landlord’s building insurance. Essentially, it means that you are able to make the adjustments that are needed in order to make the space work for you and your business, whilst ensuring that you do not lose out if something happens to it.
Employer Liability Insurance
Employer liability insurance is legally required for any employer. As long as you have someone (or people) working for you, you must have this insurance to protect you and your business if something happens to them. This could be an accident or fall, for example on your premises, or maybe long-term injury from doing their job – repetitive strain injury or the likes. This means that you are covered if an employee gets injured and makes a claim against your business.
Choosing the Best Insurance
When it comes to deciding which insurance company to use and which insurance policy to take out, there are many options available to you. Of course, every business is different, and different companies and different policies will work for different businesses. There are, however, some factors that you should consider when you are deciding on what to go for in addition to the prices that you have been offered. You should think about:
• Researching their reputation and financial stability
• Looking into their claims process – including timelines
• Considering other add-ons that the insurance company offers (such as business-interruption damage or accidental damage)
Final Thoughts
For first-time business owners especially, navigating the seas of insurance can be a daunting and confusing aspect of renting and moving into a commercial unit. It is, however, also an important aspect, as it not only becomes a legal necessity, but also one that will protect you, your employees, and your business should the worst happen.
If you are looking to rent a commercial unit for your business – or if you are a commercial unit landlord looking for tenants, have a look at our website and see what we can do for you, today!