Insurance for Commercial Property Owners

Commercial property owners typically need a Commercial Property policy (building and contents coverage), General Liability insurance (for slip-and-falls and third-party claims on the property), and often a Commercial Umbrella to meet lender and lease requirements. If you have employees or on-site management staff, workers' compensation is also required. Properties with tenants also need to address the business income (loss of rents) coverage gap.

Loss of rents (also called business income for rental properties) coverage reimburses you for rental income lost when a covered loss — fire, water damage, etc. — forces tenants out and makes the property uninhabitable while repairs are made. For commercial property owners who depend on rental income to service their mortgage and operating expenses, this coverage is essential. Most commercial property policies include or offer this as an endorsement.

Yes. Your tenants' general liability policies cover their business operations inside your building. They do not cover your liability as the property owner for common areas, parking lots, building systems, or structural issues. Premises liability — a slip-and-fall in your parking lot, a falling ceiling in a common area — is your exposure as the property owner, and you need your own GL policy to address it.

Commercial property insurance is specifically designed for investment and business-use properties. It covers higher valuations, business income interruption, tenant improvements, and the liability exposures of operating a commercial building. A homeowner's policy would not cover most commercial property losses and would likely be cancelled if the carrier discovered you were using it for a business property.