Should a Business Carry Renter's Insurance?

6/18/2021 (Permalink)

Most small businesses will need some form of renter's insurance.

Most small businesses don’t own the land they sit on. If your business rents space in Manasota Key, FL, you might consider renter's insurance. This type of policy is tailored for commercial tenants who need three layers of coverage:

• Liability
• Company property
• Loss of use

Doesn’t the Landlord Provide Insurance?

Some landlords provide a certain amount of coverage for tenants. However, that’s usually the exception. Business tenants are legally considered to have a higher degree of sophistication, so they’re generally responsible for their own insurance coverage.

What Does Renter's Insurance Cover?
Any peril covered by standard property insurance is typically covered by a tenant’s policy. The key difference is that the contents of the building are covered, not those items considered part of the building.
Just like a standard property insurance policy, it also doesn’t usually cover flood damage. If you have a flood and it isn’t covered by your insurance, you need a flood damage restoration expert who specializes in a “restore versus replace” mentality to make the process affordable.
Liability for incidents on your property is typically included. Running a business without liability insurance is incredibly risky and normally prohibited by lenders or investors. Renter’s policies also usually cover the move to a new location or the loss of use while your establishment is being restored.

Does It Cover Income Loss?
Definitely not – at least, not without a rider. You need business income interruption insurance to cover lost revenue. This is almost always worthwhile if you can afford it since around 90% of businesses eventually fail without it if they’re forced to close for a disaster.

What Perils Does It Cover?
All the disasters named in your policy would be covered. This typically includes fire, wind, storms, theft and vandalism. The liability portion covers most instances of injury excluding gross negligence on your part. It should be considered the equivalent of standard property owner’s insurance in most ways. However, you should still read the policy since every company has differences.
Most small businesses will need some form of renter's insurance. Call around to find the best price and ideal coverage for your small business.