As a landlord, it’s important to understand what you need from an insurance policy to protect your properties. Whether you’re the landlord of a buy to let residential property, or you’re renting out commercial premises, accidents can and do occur and it’s important you are covered, even if you have the perfect tenants.
Here we explain the difference between the two types.
Residential Property Owners Insurance
Insurance for residential landlords differs from a home insurance policy, which does not cover buy to let properties. This insurance covers you for the risks associated with tenants living within your properties, including:
- Damage to the building from fire, flooding and vandalism – the policy will cover you for any damage to the property up to the sum insured. Always ensure you cover yourself for the right amount. You should state the rebuild cost of your property and not its market value, when insuring the property.
- Loss of contents – whilst most properties tend to be rented out unfurnished (and only integrated appliances are covered), you can opt to include contents to the policy, should you wish to rent out the property with furniture.
- Loss of rent – should your tenants have to move out due to any damage caused, your policy can cover you for any money you may lose on rent whilst the property is being repaired. You can also add alternative accommodation to your policy, to house your tenants whilst work takes place.
It is essential you take out Property Owners Liability Insurance as part of your package. If an injury were to occur to one of your tenants that was proven to be your fault, you would be held liable. Injury for example, could occur through an electrical or gas fault, a loose floor covering or even an internal structure collapsing or corroding.
Commercial Property Owners Insurance
If your property if being rented out to a third-party business, you will need to take out this type of insurance. Commercial properties are built differently to residential buildings and therefore pose different risks. For example, if your property hosts a restaurant or café within it, there will be a higher risk of fire due to the kitchen equipment and daily waste. A shop or office may have a large portion of people coming in and out of the building daily. Many commercial buildings have larger glass fronted windows or they may be made from different materials to a standard residential building. This all adds to the risk, making the risk naturally higher with commercial buildings. This insurance covers you for the risks associated with tenants running their own business within your property, including:
- Damage to the building from fire, flooding and vandalism - the policy will cover you for any damage to the property up to the sum insured. Anything fixed or fitted is included.
- Loss of rent – should your tenants have to move out due to any damage caused, your policy can cover you for any money you may lose on rent whilst the property is being repaired.
With commercial premises it is up to the landlord to take out Property Owners Liability Insurance. The tenants are responsible for Public Liability and Business Interruption Insurance, so it’s wise to make sure they have these policies in place when you take them on.
There is no need to be juggling multiple policies for your insurance. You can insure both your commercial and residential portfolios with us under one policy, saving you time and money.
Call our friendly team today to find out more on 01353 652760.