Does business insurance
COVER MY OFFICE RENTAL
The answer is: it depends. What part of your office rental are you asking about? Loss or damage to the equipment and property inside? Injury to your employees or visitors? What about damage to the building itself?
Your landlord will have their own property insurance for the building, but their coverage may not extend to the property or people within the specific office space you’re renting in all cases.
For that, you’ll need some combination of general liability and commercial renter’s insurance. Read on to learn what’s included in these policies, so you can make the right decision for your office rental.
What’s included in commercial property insurance for a renter?
Most business owners who rent office space choose to protect it with commercial property insurance for a tenant. You might be thinking to yourself, “My landlord already has insurance for the building. Why do I need to have renter’s insurance, too?” Here’s why.
Let’s say a fire occurred that caused damage to the building and the offices inside it, including yours. Your landlord’s insurance would only cover damage to the building itself. It would not cover your property inside that building, such as your computers, furniture, file cabinets, personal belongings, inventory, and more.
The same goes for other losses like theft and severe weather damage. The building owner’s insurance would cover things like damage to the building’s windows and roof — but for anything that’s yours, you’d be out of luck.
Generally, you can assume that any of your property within your office rental space is not covered by your landlord’s property insurance. To protect your property, you need your own insurance to cover your business personal property (or contents) and even any additions and alterations you may have made to the premises once you leased the space. For example, if you made structural modifications within your office rental or replaced the windows, your landlord may require you to protect those under your insurance. Never assume that something is covered by your landlord’s insurance. Your best bet is to always review your lease, to know what kind of damage your landlord expects you to be liable for and, if needed, purchase coverage under your own commercial property insurance.
The bottom line: Commercial property insurance for renters covers your exposure if something happens to the property in your office rental, such as theft or damage to your equipment. It can also provide coverage in situations where you or your employees accidentally damage the building itself, such as a wall.
Now, suppose something were to happen to someone in your office rental. What insurance would you need to cover that?
Commercial property insurance protects your property in case of physical loss, damage or theft. But there’s one important thing it doesn’t cover: the people who work in and visit your office. Depending on who will be working out of your office space, you’ll need at least two types of third-party insurance coverage: general liability and workers’ comp insurance.
General liability insurance and your office rental
General liability insurance protects your business from costs related to liability for covered accidents that cause injury or damage to third parties. Being in business requires doing business with third parties, from customers to vendors, so general liability insurance is essential insurance every business owner should purchase, regardless of whether or not you’re renting office space.
Many people know this as “slip and fall” insurance because that’s a common type of accident covered by general liability insurance. If someone were to visit your office and injure themselves, general liability insurance could provide coverage for their medical bills.
The same goes if that visitor’s property is damaged while in your office space. If some of your equipment falls on and scratches their expensive purse, your general liability coverage could help reimburse them for the cost.
But, if they were to get injured or experience property damage while they were in the building’s public areas, such as the lobby, your landlord’s property insurance should cover the accident—not yours.
A general liability policy will provide coverage for the premises you rent if it is damaged by fire while you rent it.
It’s important to remember that general liability insurance only provides coverage for third parties. Even if you don’t have customers visiting your space, you likely have other third parties visiting from time to time, from an employee’s spouse to the mailman. If something happens to these third parties, you’ll want to be protected with general liability insurance.
What if no one comes to my office rental besides me? Do I still need general liability insurance?
We’ll keep this quick: yes, you do. It’s a good idea to have this type of business insurance even if you don’t have people visiting your space. Here are four reasons why:
- It’s commonly required by landlords. When you sign your lease, chances are that your landlord will want to see a Certificate of Insurance for your general liability policy. They may even ask that you add them as an Additional Insured (we make this process super easy at Thimble, by the way).
- If something happens to a person visiting your space in their building, the landlord wants to ensure that you’re the one responsible for any damages when something occurs in your space, not them. Moreover, it’s possible that something you or your employees do could cause damage to other tenants in the building. Again, your landlord will want to ensure they’re not the one footing the bill.
- It protects you from costs related to liability for claims arising out of your business operations. Whether you visit a client or a client visits you, you may still be sued for causing injury or damage to someone as a result of your day-to-day operations. Even a personal trainer, who does all of her classes remotely, could have such an exposure. General liability insurance will provide the investigation, defense, and if applicable, settlement of such claims.
- It protects you for costs related to liability when you visit your clients’ offices or homes. People may not visit your office space, but if you visit theirs, you’ll want the same protection in case you accidentally hurt someone or something while you’re working. General liability insurance provides coverage for claims of third-party bodily injury or property damage that occur as a result of your work—whether it’s in your office or your client’s. It provides coverage for claims of personal and advertising injury. General liability insurance protects you from claims involving third parties. One type of third-party claim many business owners don’t consider are other types of personal injury or advertising injury, like libel, slander, copyright infringement or defamation. If someone claims you copied their website or logo, general liability insurance can save the day yet again.
Workers’ compensation insurance and your office rental
There’s one group of people for whose claims a general liability policy will not respond: your employees. So, in addition to general liability insurance, you may need to purchase a workers’ compensation policy. If you have employees, even just one, you must have workers’ compensation insurance. (We’re not just saying that; it’s required by law in almost every state).
This insurance will pay for your employee’s medical bills, ongoing treatment, and lost wages if the employee gets injured on the job. It also pays for funeral expenses if the unthinkable happens.
Bottom line: If you want to protect yourself against the cost of claims for injury to people in your office rental, you’ll need more than just commercial renter’s insurance. You’ll need general liability coverage for clients, visitors, and other third-parties, and workers’ comp for your employees.
Business interruption insurance for your office rental
Here’s one more thing to keep in mind when considering insurance for your office. There’s always a possibility that you could experience a loss in business income due to a direct physical loss or damage to the property where your office is located. There could be a building fire, so you have to temporarily move to another location or even shut down your operations entirely for a while. You may lose income for the time you are shut down, or for clients that do not want to travel to your new location, all while incurring extra expense to start up your operation again in the interim.
There’s protection for this type of situation, too, and it’s called business income and extra expense coverage or business interruption coverage. It’s often included as part of a business owners policy (BOP), or can be bundled together with the commercial property coverage.
If your business experiences a covered loss that results in a loss of income or extra expense to you, this business interruption coverage can help reimburse you for those out of pocket losses.
Business insurance for your office rental
For many businesses, renting an office space is an exciting step. It usually goes hand in hand with growing your business, whether you’re expanding into new territory, hiring more staff, or opening a retail location.
But with more opportunity comes more risk. Ensure your office rental —and your business—are protected. Look into commercial property coverage to protect your property, and get started with general liability insurance arranged by Thimble today. Just tell us your ZIP code, your industry, and how long you need coverage for, and receive your instant quote.