Understanding your obligations as a first-time commercial property tenant is imperative to safeguard your best interests. It’s a good idea to familiarise yourself with the tasks that you are obliged to oversee, as well as those that should be handled by any responsible commercial property landlord.

In most cases, building insurance is not one of those liabilities for tenants, contrary to what you might think. The responsibility of insuring the property will be defined in the lease by your commercial property landlord. In most cases, the landlord will arrange and pay for the cover. However, it’s possible that your landlord may arrange the cover and then request that their tenants pay for the insurance as part of annual service charges or as a separate charge.

A commercial property landlord is not required to pay for every kind of insurance on a workspace. Let’s look at some of the insurance products you may need or want to take out as a first-time tenant.

Tenants improvement insurance

If you decide to invest money in refurbishing or enhancing your commercial space during the period of your tenancy, it may be a good idea to apply for tenants improvement insurance. The reality is that your enhancements won’t be covered by the landlord’s building insurance. If the property were to burn to the ground and require a full rebuild, the building insurance would only cover the cost of rebuilding the shell or structure of the property, restoring it to its original pre-lease state.

With tenants improvement insurance, you can be covered for a comprehensive refit of enhancements such as electrical wiring, lighting, air conditioning, kitchen units, telecommunications and more.

Contents insurance

Business contents insurance differs from building insurance. It insures the contents within your commercial premises as opposed to the premises itself. Would you be able to reopen your business promptly if a fire or flood damaged day-to-day items like computers and machinery? With a contents insurance policy, you can claim for like-for-like replacements of any items lost, stolen or damaged.

Public liability insurance

If your business undertakes work on the property of your clients, it’s imperative that you seek public liability insurance. This will safeguard your business in the event your business causes injury to a third-party or damage to a customer’s property. Public liability insurance is also important if you welcome customers on your own premises too. If a prospective customer suffers injury on your property, and your business is found to be at fault, public liability insurance can cover the costs of insurance claims.

Employers’ liability insurance

If you have a growing workforce, it’s also important to protect your business from any compensation claims made by employees. Staff who are found to become injured or ill due to on-site negligence may claim against your business. Employers’ liability insurance is a legal requirement. Businesses without this cover for their staff can be fined up to £2,500 per employee per day.

When you let commercial property for the first time with Pall Mall Estates, our friendly and experienced property professionals will clearly explain your insurance obligations as part of the terms of your first lease.

To arrange a viewing of any of our available units, call us today on 020 8108 4748 or drop us a line using our online enquiry form. We ensure every viewing is conducted in strict accordance with any active social distancing guidelines at the time of your appointment.

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