All The Essential Insurance Information For Commercial Landlords You'll Ever Need!

Many of those who are looking to acquire a commercial mortgage have no idea how essential having the right insurance policies can be. We're not just talking about one policy for everything, you will a handful of different policies to cover every eventuality and the cost of the premiums can soon add up, building, contents, liability, fire, flood to name a few of the main policies.

No matter if you're a residential or commercial landlord, you are responsible for people living or working on your premises so 'standard' insurance policies just will not cut it, you will have to the correct commercial insurance policies to be fully and legally covered.

There are key differences between buy to let and normal's property insurance. The buy to let insurance will cover your property if it is damaged through the negligence of tenants, if one of them leaves a tap on, sets fire to the sofa or damages the property in any way, you can still claim on the insurance policy.

Your insurance may cover these types of mishaps or any type of accident that could affect your property. So if your tenants accidently damage part of the building then your policy could cover the costs associated with repairing the damage!

Buildings insurance is extremely important as the property, in terms of bricks and mortar, are the security for the mortgage and so the building needs to be covered to ensure that it can be rebuilt or renovated if need be.

Another issue with commercial landlords is that the property may end up being unoccupied for a certain amount of time if a tenant moves out and before another movies in. So it is important that you have some kind of insurance in place in case this happens. This would ensure that you can afford to pay the commercial mortgage even if you do not have the rental funding coming in and so mortgage lenders are more comfortable and more at ease that there is cover in place to ensure that the commercial mortgage can be paid no matter what.

Liability insurance is another thing to consider if you are a commercial landlord, because if there is an accident on your property you could be liable and so this ensures that you have cover to pay legal expenses if the worst should happen.

The extra insurance policies for commercial property don't stop their either, some lenders covering commercial property would like to see 'property insurance' added to the roster of policies covering your property as a back up to building insurance. Lenders sill insist on this for the same reason they insist on building insurance, to cover any potential default on the remortgage so the property can be resold on the market at the same time.

Contents insurance is not a requirement, but strongly advised if your goal is to rent furbished accommodation or property on the market. Contents insurance will cover, damage, theft etc to all furniture and appliances within the property.

It doesn't matter the type of commercial mortgage you take, always make sure that you take the correct insurance so that you are covered in times of need as not having the right cover for your premises can be devastating.


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Timothy Frodsham writes for Just Commercial Mortgages the UK's No.1 site for the latest commercial mortgage rates and commercial property finance news.