Commercial Landlord Insurance (UK)

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Commercial Landlord Insurance Comparison(UK)

Do you know about Commercial Landlord Insurance? Protecting your assets against the unforeseen is always important, and especially if you own an office block or a commercial unit or building. Life is fraught with unexpected challenges, so you need to be financially covered across the board. You can’t take risks where your investment and other people’s safety is concerned. 

Commercial Landlord Insurance can protect your best interests and is dedicated to commercial property owners who need financial coverage. Let’s delve deeper to find out why you need this type of coverage, how it works, and why it suits your commercial property needs.

What is Commercial Landlord Insurance?

Commercial Landlord Insurance is essential coverage for property owners who want to rent their premises to third-party businesses. This type of insurance covers a list of potential risks for commercial buildings, offices, and even retail premises and shops. It’s not the same as standard residential landlord insurance because business premises and shops get more visitors and require specific coverage. 

What Does Commercial Landlord Insurance Cover?

You are covered against specific risks with commercial landlord insurance in the UK. The three main ways that commercial landlord insurance differs from standard residential insurance building types, building uses, and business insurance. But what are the risks that commercial landlords face? What are the risks, and what are you covered against?

Commercial landlord insurance covers the following:

  • Damage Coverage – You are covered against damage of all kinds. In the event of flooding, fire, or vandalism, you are covered. These types of policies can even cover building repairs or even rebuilding projects.List Element
  • Accident Coverage – Even small mistakes and accidents can cause major fires and other major claims. A loose tile or even a trailing wire can cause an accident that might be your fault as the landlord. Add-ons like Landlord Liability Insurance will keep you and your tenant, and even their customers covered.
  • Business Interruption Coverage – This type of coverage is sometimes referred to as ‘rental income protection’. If flooding or other accidents that are deemed your responsibility prevent your tenant from opening their business, this policy can keep them trading or pay for any losses incurred.

Please remember that commercial landlord insurance policies cover the potential risks of third-party businesses renting your premises. If the tenants are living in your property, specific policies such as residential landlord insurance or comprehensive landlord insurance are required instead.

What responsibilities does a commercial landlord have?

A commercial landlord has heightened responsibilities when compared to a standard residential landlord. You have a duty to your tenants to ensure that your building, office, or shop is a safe environment. However, there is much confusion about who is responsible for the various aspects of health and safety.

These issues are not clear-cut and obvious like in a residential property letting. There is also a lot of deviation and variation with lease agreements and individual properties that can be a potential minefield for everyone involved. Let’s take a deeper look at each responsibility and the varying nuances involved.

Health & Safety

Commercial landlords have certain legal responsibilities that cannot be denied. The greater responsibility generally lies with the tenant in most scenarios, but that can depend on the lease agreement and also the individual issue. At all times, your tenant(s) are responsible for adhering to the Fire Safety Regulations that are part of the Health and Safety at Work Act 1974. Please see these responsibilities below:

  • Keeping a reasonable temperature
  • Ensuring adequate lighting, ventilation, and space
  • Ensuring drinking water is available
  • Adequate toilet and washing facilities
  • Safe working equipment

Please note that landlords are responsible for health and safety in the communal areas of the building or office space, which you can find in the lease agreement.

Fixtures and Fittings

As a commercial landlord, you are responsible for all the fixtures and fittings in the property. You need to ensure that all fixtures and fittings are maintained and installed properly in the safest possible way. The definition of ‘fixtures’ is large items attached to the property, such as lighting or heating systems. The definition of ‘fittings’ is items that are not attached to the property aside from nailed on items such as pictures.

The only time a tenant is responsible for fixtures and fittings are items they have installed themselves in your property.

Electricity and Gas

Whether the landlord or tenant is responsible for gas and electricity is decided by the terms in the lease agreement. It could be the responsibility of either or both. It’s usually the landlord's responsibility for maintaining the gas equipment, so they will have to organise the yearly gas safety inspection from a registered gas safety engineer. The tenant is also most definitely responsible for any gas equipment they have personally installed.

The landlord is legally required to carry out an electric safety check every 5 years.  

It’s your responsibility as a landlord to ensure that the electrical system is safe in the property. The electric system must be “safe at the beginning of the tenancy” and “maintained in a safe condition for the entire duration of the tenancy” as noted in the Landlords and Tenants Act 1985. Your duty also extends beyond the lease of your tenant and also covers anyone who visits the premises as a customer or worker. Have a look at our detailed guide on providing an electric safety certificate in our guide on electrical safety certificate cost.

The safety and maintenance of electrical equipment bought by the tenants is their responsibility. Tenants might also be responsible for maintaining all electrical appliances to the exact specifications of the manufacturers, depending on your lease agreement.

The safety of all gas and electrical installations in communal areas of the building or office is the landlord’s responsibility. You will also need to obtain an Energy Performance Certificate (EPC) with a rating of E or more on any newly let commercial properties.

Repairs and Maintenance

The lease agreement will define if the landlord or tenant is responsible for maintenance and repairs. Generally speaking, landlords are responsible for structural maintenance that covers external matters such as the foundations, exterior walls, roofing, and flooring. Non-structural repairs that cover air-conditioning or plumbing are the responsibility of the tenant. 

Commercial landlord responsibilities fire safety

The “responsible person” is in charge of commercial property fire safety according to the Regulatory Reform (Fire Safety) Order 2005. The term, responsible person, is generally the employer of the business in a workplace. So in this instance, it will be the tenant. But the landlord does have some responsibilities, such as providing fire safety equipment like extinguishers or fire blankets. And landlords are always responsible for fire safety in communal areas of the building or office. 

Who is responsible for commercial building insurance? Landlord or tenant?

As the landlord and owner of the commercial property, you are responsible for organizing the building insurance. Although there are currently no legal requirements for having building insurance, you should already have it in place so your tenants are covered. It’s common for landlords to organize and pay for commercial building insurance and then pass on the costs to the tenant in your rental contract. However, always check the details in the rental agreement first.

It's important to ensure you have the proper coverage as a landlord of a commercial property such as an office or retail space. Not only is it a legal requirement, but it’s the right thing to do. 

Getting the proper coverage for renting your building out to third-party businesses will cover damages to your premises in the event of a fire or other unforeseen circumstances. 

You and your tenant will also be covered for accidents and even for business interruption because of a fire or building damage. As a commercial landlord, you are not only responsible for the safety of your tenant, but also customers who visit the premises. Getting the proper commercial landlord insurance and knowing your responsibilities to your tenant are essential. 

Horsebox Insurance FAQ's

are commercial landlords responsible for fire extinguishers?

Commercial landlords are responsible  to provide fire precautions that include fire extinguishers, fire alarms, fire safe doors and an  escape route to a place of safety.

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