What is renters insurance?
Also known as tenants insurance, renters insurance helps cover your own property and the contents within the building if they’re damaged, stolen, or destroyed in a covered peril. You’ll also get covered for third-party liability on the premises for which you’re responsible.
When you operate a business with a storefront, offices, or other physical space, there’s always a risk that something can happen under your roof that leaves you exposed to risk.
Renters insurance, also known as tenants insurance, helps cover your own property and the contents within the building if they’re damaged, stolen, or destroyed in a covered peril. You’ll also get covered for third-party liability on the premises for which you’re responsible.
Think of renters insurance as a policy that covers everything from the wallpaper in: in other words, everything within your rented space is protected. This can include your machinery, personal property, or the property of customers. Plus, this policy can also help pay for medical and legal expenses due to third-party bodily injury.
What does renters insurance cover?
Commercial landlords are responsible for making sure their rental properties are up to code, safe for occupation, and that repairs are done quickly. Their tenants are responsible for pretty much anything else that may happen within the space they’re renting. Your landlord might be liable if someone slips on ice outside their building, but you’re responsible if someone slips and falls inside the building on your business premises.
Renters liability insurance (which is part of a standard renters insurance policy) can provide defense, pay for a third party’s medical bills, or arrange for the repairs to their property if you’re held responsible. 1
There are several cases in which renters insurance can come in handy, such as
- An employee leaves a piece of pita in the pantry’s toaster for too long, resulting in a small fire. Your plan could cover the cost of repairing fire damage to landlord-owned property.
- You’ve installed an exterior sign incorrectly, causing it to swing onto a parked car. Your policy could help you pay for subsequent auto repairs.
- A client trips over an ill-placed piece of furniture and falls. Your policy would cover their medical bill.
Renters liability insurance policies won’t cover certain incidents and items, however. If you or another insured caused the destructive act on purpose, your policy wouldn’t cover related expenses.
The property portion of a renters policy covers accidental loss or damages to your business’ physical assets. That means you won’t get reimbursed to fix a broken laptop or desk chair if it arises from standard wear-and-tear or lack of maintenance. Make sure to get the right insurance level for your business needs.
Why is renters insurance important for businesses?
Renters, or tenants, insurance is vital for businesses that want to lease commercial property. Most landlords will expect you to have a liability policy as part of your lease agreement.
Property damage can get expensive quickly. Businesses that operate on slim margins or have a delicate balancing act with their cash flow may find that a major accident can wreak havoc on their books. Making consistent premium payments on a renters insurance policy means knowing how much you have to budget every month.
Plus, landlords will be happy to see that you’ve thought ahead with a policy even when they don’t require one to rent.
What is renters liability insurance vs. commercial general liability insurance?
Commercial general liability insurance covers a broad assortment of potential claims for damages to other peoples’ property. It covers property damage done to third parties, which may include your landlord. The scope of commercial general liability insurance makes it a must-have for businesses of any kind.
A commercial general liability policy purchased for your business risk will also cover your exposure as a tenant, so there is no need to purchase a separate policy for your renters liability. In fact, most business policies that package property and liability coverages will provide broad commercial general liability coverage.
By contrast, some renter’s policies can be much narrower in focus. These plans cover one’s liabilities as a tenant in another person’s property, rather than the full spectrum of claims covered by general liability insurance. Plus, your landlord may only require that you have a renters insurance policy before handing over the keys.
It may actually be the exception, rather than the rule, to be able to find a renters-only policy. If you already have a general liability policy for your business, check with your insurance agent. You probably do not need to purchase a separate renters policy.
What businesses need a renters insurance policy?
Any business that rents space—be it for offices or retail shops—should buy a good renters insurance policy if they do not already have a commercial general liability policy.
You’ll want to know you’re protected from having to pay out of your profits to repair or replace property of third parties if employees, clients, or shoppers damage it.
Retail businesses need renters’ insurance to help pay for accidental loss or damage to their belongings or to protect against the cost of injury to people or damage to property on their rented premises. Whether that means a fire breaks out and destroys your stock, or an employee spills a milkshake on a customer’s designer purse, or a sandwich board falls on a pedestrian’s foot, your policy can help pay for related costs to keep you in business.
Let’s say you run a technical support business that only works with customers remotely. Even though you don’t have customers on your premises and may only have clients visit you occasionally, you still need to protect your assets if you are sued for personal or advertising injury. It may be slander or the pilfering of another’s advertising slogan. Renters liability insurance would have your back here.
Getting the right coverage for your business
Thimble is all about helping businesses find the right insurance for their needs. Not everyone needs renters insurance because they have commercial general liability insurance. They should, however, explore purchasing professional liability coverage.
That’s where we come in: Thimble’s intuitive questionnaire makes it easy to get coverage with minimal fuss. Policies arranged by Thimble offer the flexibility you need with a quote that fits your businesses. We believe in making insurance affordable and understandable, which is why we make getting a quote as easy as clicking a button.
In summary, if you’re renting an office or storefront, you want an insurance policy that can protect you if you suffer a loss of personal property, or cause third-party damage or bodily injury.
Remember: This is true even if your landlord doesn’t require you to have insurance before signing the lease. Be prepared with a renters insurance policy before taking the keys to your new place of business.