Renters Insurance

When you lease a storefront, office, or another type of physical space, there’s always the risk that something could happen to your company’s assets. No need to lose sleep over it, though, when you have renters insurance.

But what is renters insurance? Also known as tenants insurance, renters insurance helps cover your property and the contents in the building you rent if they are damaged, stolen, or destroyed in a covered peril. Think of it as a policy that protects the assets inside your business, from large machinery and computer equipment right down to the paper clips.

What does renters insurance cover?

As a tenant, you are responsible for the property you keep in the building you lease. Additionally, you can be held liable for damages you, or people affiliated with your business, caused to the building. Renters insurance helps to compensate you when situations occur that result in property or bodily injury. It can also provide liability coverage if you are sued.

In summary, most renters insurance policies cover:¹

• Business property: The property your business keeps in the building from furniture and phones to inventory and equipment.
• Property damage liability: If you or your employees cause damage to the building or another tenant’s property, renters insurance can help to cover the costs of necessary repairs.
• Bodily injury: If a third party is injured within the space of your business, renters insurance can help to cover their lost wages, medical bills, etc.
• Business interruption: If your business is interrupted due to a covered event, renters insurance can cover your lost profits and continued operating expenses for a specified time period.

Does renters insurance cover water damage?

Whether or not water damage is covered by your renters insurance policy is a bit tricky. Renters insurance will typically cover water damage caused by sudden water discharges, such as faulty fire sprinklers, a plumbing failure, an appliance failure, or other accidental water discharges.

However, renters insurance won’t typically damage from floods due to weather. Often, you can purchase commercial flood coverage as an optional add-on. The same applies to damage from sewer and drain backups.² Most standard policies don’t cover risks due to sewer failures or breakages.

Does renters insurance cover theft?

Yes, theft is a common occurrence that renters insurance can help to cover. Most standard renters insurance policies include coverage for theft, though some policies offer theft as an optional add-on.

Other perils that are often covered under a renters insurance policy include damage caused by fire, smoke, vandalism, windstorms, hail, explosions, falling objects, lightning, electrical surges, and the weight of snow, sleet, or ice.

What does renters insurance not cover?

Renters insurance policies won’t cover certain incidents and items. If you or another insured deliberately caused the damage, your policy wouldn’t cover the related expenses.

Further, the property portion of a renters policy covers accidental loss or damages to your business’s 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.

And, as mentioned previously, certain natural events like floods and earthquakes are not covered. Make sure to read your policy carefully so you get the right insurance level for your business needs.

How much renters insurance do I need?

The amount of renters insurance you need depends on various factors, including the value of the assets you need to protect, the level of risk associated with those assets, and the amount of risk you’re willing to take on yourself.

For example, if a fire or theft occurs, how much will it cost you to replace the items damaged, destroyed, or stolen? And how much risk are you willing to shoulder yourself versus sharing it with an insurance company? If your answer is “not much,” then you want to make sure your policy maximum will cover the value of your assets should an unforeseen disaster or accident occur.

Is renters insurance legally required?

While renters insurance is not required by federal law, most landlords will require companies signing commercial leases to have a liability policy as part of their lease agreement. However, whether required or not, it’s important for businesses leasing commercial space to make sure their company is protected.

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 profit and loss statement.

Why is renters insurance important for business?

Renters insurance protects your business from losses under a variety of circumstances. When you have renters insurance, you won’t have to worry about going bankrupt if you suffer a burglary. Your insurer can compensate you for your qualifying losses and expenses, giving your business a much-needed layer of protection.

Any business that rents space — whether for an office, a retail shop, or some other kind of commercial space — should buy an appropriate amount of renters insurance.

Retail businesses, for example, need renters’ insurance to help pay for accidental loss or damage to their inventory, mannequins, or display cases. Whether that means a fire breaks out and destroys your inventory or a sandwich board falls on a pedestrian’s foot, your policy can help pay for related costs to keep you in business.

Getting the right coverage for your business

If you own the building you operate your business from, then renters insurance does not apply to you. If you need coverage on your owned building, then consider Thimble’s business owners policy (BOP) insurance.

Our BOP insurance offers a comprehensive solution that combines general liability insurance with commercial property insurance. Click “get a quote” and get insured in minutes.

Sources:

1. Voss Law Firm, Will Your Commercial Renters Insurance Save You After A Large-Loss Fire?
2. NY Department of Financial Services. Renters Insurance.