Getting into the commercial real estate game isn’t for the faint of heart. In the United States, there are around 5.9 million commercial buildings; landlords of these businesses, the owners, may be required to obtain real estate business insurance to protect their assets and ensure the smooth operation of the tenants within your business.
But how much does it cost? One of the most vital aspects to running any business is ensuring you have adequate protection, including commercial landlord insurance for those whose business is in renting out business property. Here’s the rundown.
What is commercial landlord insurance?
Commercial landlord insurance is a specialized type of business insurance that is designed to protect property owners who rent out commercial spaces, such as office buildings, retail stores, warehouses, and industrial properties. This insurance typically covers a range of risks and losses that are commonly associated with owning and leasing commercial real estate, including:
- Property Damage: Covers the cost of repairs or replacement if the building or its contents are damaged by perils such as fire, vandalism, or natural disasters.
- Liability Coverage: Protects the landlord against legal claims if someone is injured on the property or if the landlord is found liable for damage to a tenant’s property.
- Loss of Rental Income: Compensates the landlord for lost income if the property becomes uninhabitable due to a covered event, such as a fire or flood, preventing tenants from occupying the space.
- Legal Expenses: Covers legal costs associated with disputes, such as evictions or contract issues with tenants.
Commercial landlord insurance policies may be customized, in the same way any commercial insurance policy can be. Working with an agent can help you determine exactly the kind of coverage your business may need, while cutting away the fat (the coverage you don’t need) and saving you money.
How much is commercial landlord insurance?
The cost of commercial landlord insurance can vary widely depending on several factors, typically ranging from a few hundred to several thousand dollars annually. The specific cost will depend on the value of the property, the types of coverage included, and the risk profile of the business. Every insurance company is different, keep in mind. Some insurance companies will charge more or less for specific types, sizes, or locations of properties, all depending on how they weigh certain factors.
Generally, premiums are influenced by the location of the property, the type of building, its age and condition, the business activities conducted on the premises, and the level of coverage desired. However, it’s a lot more in-depth than that. Here’s a list of the factors that may influence the cost of your insurance:
Location
Where a building is located in a city, and what city it’s in, can have a significant influence on insurance premiums. Some cities see more crime, worse weather, and similar disastrous events, which could result in a building being more at-risk of a loss. The likelier the loss, the more expensive the insurance.
Property Value
The higher the value of a property, the more the insurance will cost. This is because, ultimately, that building will cost more to replace due to an accidental loss.
Type of Building & Age
Older constructions and unique constructions may be more vulnerable to potential losses than newer, structurally sound builds. Special features will also cost more to insure.
Business Activities
The type of businesses that are leasing your commercial space can impact risk, affecting insurance costs. For example, retail businesses operating in your commercial space may not cost as much to insure as if you leased to, say, an indoor arcade or axe-throwing facility.
Coverage Limits
The more coverage you buy, the more it will cost. The same goes for increasing limits, and also having a lower deductible–meaning the insurance company pays out more in the event of a loss–can increase your insurance rates as well.
Claims History
Having had previous claims can be an indicator of making claims again in the future. If you’ve had a lot of claims, or severe ones, your insurance rates could be higher.
Security and Safety Features
Properties with robust security systems, fire alarms, and sprinkler systems may benefit from lower costs.
Connect with AHI Insurance for lower commercial property insurance costs
At AHI Insurance, we understand the unique challenges and risks associated with owning commercial properties. Our experienced team is dedicated to helping you find affordable and comprehensive commercial landlord insurance tailored to your specific needs. We work with a variety of top-rated insurance providers to offer competitive rates and customizable coverage options. Whether you own a small office building or a large retail complex, AHI Insurance is here to provide you with peace of mind and financial protection. Let us help you secure the best coverage at the best price, so you can focus on managing your property with confidence.
