If your business leases space from a commercial property manager, chances are you have sufficient business owner and umbrella insurance coverage. Most landlords have extensive insurance requirements tenants must obtain prior to occupying their space. If you are contemplating whether to start a business or if you already run a business out of your home or another piece of property, having the right insurance coverage is important.
While specific coverage amounts requirements may vary depending on the type of business, tenants are generally required to maintain the following types of insurance coverage at their own cost.
(1) Commercial general liability insurance applicable to the premises and its appurtenances.
(2) Property insurance covering all above building standard leasehold improvements and tenant’s trade fixtures, equipment, furniture and other personal property within the premises. (3) Business income (formerly “business interruption”) insurance written on an actual loss sustained form or with sufficient limits to address reasonably anticipated business interruption losses.
(4) Business automobile liability insurance to cover all owned, hired and non-owned automobiles owned or operated by tenant
(5) Workers’ compensation insurance as required by the state in which the premises is located and in amounts as may be required by applicable statute (provided, however, if no workers’ compensation insurance is statutorily required.
(6) Employer’s liability insurance
(7) Umbrella liability insurance
Before committing to a lease, work with the landlord to make sure the coverage requirements are in place to fulfill any lease requirements. It is a safe bet the landlord will not allow occupancy until the requirements are met but proactive communication about coverage requirements can sometimes be negotiated and lead to savings. If you or your business owns and occupies a place of business, consult a commercial property and casualty insurance expert to assess needs and obtain the necessary coverage. If you do not have a commercial property and casualty contact, a good place to start is with your personal P&C insurance agent.