Basic Insurance Needs for Commercial Property
As a property owner and potential landlord for a commercial building, it is important that you understand the insurance requirements that are needed to protect your tenants, your building and yourself from lawsuits and loss due to any number of accidents or damage. Depending on what you are using the commercial building for, the amount of insurance and type can be different. This is an excellent reason to utilize a property manager such as HighGate Properties if you find yourself in need of insurance for your property in or around the Toronto area. Experienced property managers have a portfolio of insurance agents that they can contact to help you get the best coverage at the best price for your specific type of building use.
The following questions are a great checklist of points to consider when choosing your insurance provider and how much coverage you should get.
How do I find out how much coverage I need?
Most businesses require some form of insurance to protect themselves from theft, vandalism or fire. In order to determine the amount of coverage, your first move should be to get an appraisal of the property so that you know how much it would cost to replace it in the event of a fire or other disaster. Discuss the matter with your property manager as they may have suggestions for providers and any supplemental coverage you might need to a standard policy based on their experience in the location of your business.
Do I need flood insurance?
Flood insurance is not typically included in standard commercial property policies, but that does not mean you cannot get it. Should your building be in a floodplain, you will be required to have it and it can be quite expensive. Your property manager should be able to recommend someone that can offer a decent price if you require this form of coverage.
My business has closed and reopened recently, does this affect my coverage?
There is special coverage that can protect you in the event that your building is closed due to natural disaster or any other unfortunate accident that prevents your tenants from using the space and subsequently causes a loss in your rental income. This is called business interruption coverage and is a good idea if you think there may be volatile conditions that could prompt you to close your doors for whatever reason.
Depending on your individual policy and the type of business property you own, you may wish to purchase additional insurance. The three main types of policy include basic, broad and special. As you move toward the latter you can expect your coverage to increase up to the point of everything except perils that the policy states are excluded such as terrorism, war and nuclear disaster. Should you encounter these issues, you are probably worried about more than your commercial building.
Overall you should discuss your building with a property manager and get an appraisal. You will more than likely be given some form of history of the building when you purchase it and upon review a good manager like HighGate can steer you towards a good provider with complete coverage for your needs.