Commercial property insurance-a costly common pitfall

The pitfall around commercial property insurance is one that a lot of commercial property owners misunderstand. This common pitfall is really all about understanding the language around what insurance companies use when they list the perils on a policy. When we say perils, I mean, what you’re covered for. When you get an insurance policy, you’ll go to your list of perils covered and it will give you a long list of what’s actually on there. Things like accidental damage, storm, flood- we all know what that is.

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Commercial property insurance – loss of rent is quite an ambiguous term

A common one would be loss of rent. So loss of rent is quite an ambiguous term, but if you go into the definition section of your policy, you’ll be able to tell exactly what this actually means and what you’re covered for.

Because a lot of commercial property owners think that loss of rent means rent guarantee, and very difficult to tell the difference unless you know the kink of an insurance company. But to be clear, rent guarantee is what it says on the tin.

If someone does not pay the rent, that means the insurance company will step in and pay it for you, and that could be for whatever reason.

Loss of rent is simply if there’s an insured peril, say a fire. You can’t collect the rent because the property’s burned down, for example. That means an insurance company will step in and pay the loss of rent.

The important thing with a commercial property or a policy is there is no such thing as rent guarantee, you can’t get it.

A lot of commercial property owners think that loss of rent is rent guarantee when in actual fact, it’s not.

It’s only if an insured peril occurs, then that rent would be would be covered. That’s an important thing to read the policy wording.

Make sure you understand what is actually covered because loss of rent is covered but it is not rent guarantee. That’s one more common pitfall that we find quite a lot. When policy holders come to make claims, they expect that the rent is covered. It is not.

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Why choose the Property Insurance Centre

Independent broker with staff you can speak to by phone or online

Access to a wide range of insurers to source suitable insurance cover for your needs

Bespoke Insurance Schemes & Portfolio Policies available

We can tailor your policy to suit your exact needs to give you complete peace of mind

Competitive Premiums

Cover available for the buildings while the property is being converted, renovated or extended

Over 40 years experience working with the best insurers in the UK

Excellent communication so that you understand what risks you are insured against

Why choose the Property Insurance Centre

Independent broker with staff you can speak to by phone or online

Access to a wide range of insurers to source suitable insurance cover for your needs

Bespoke Insurance Schemes & Portfolio Policies available

We can tailor your policy to suit your exact needs to give you complete peace of mind

Competitive Premiums

Cover available for the buildings while the property is being converted, renovated or extended

Over 40 years experience working with the best insurers in the UK

Excellent communication so that you understand what risks you are insured against

Specialists in Commercial & Residential Insurance

We have over 40 years experience as Residential and Commercial Insurance Brokers. We find the right policy to suit your needs and understand the risks that a property owner can face in the course of ownership. We work closely with our Insurers to get the best rates and our experience and excellent relationships with them mean that we can provide cover for even the most difficult to place risks.

Whether you have an adverse claims history, a high value property or a large portfolio of properties, we can source suitable cover for you. Whatever your requirements, we can tailor a specialist property insurance policy to suit your exact needs and provide you with a range of quotes to choose from. Established in 1976, we are not a call centre but a specialist insurance broker with a traditional office mentality, where the client comes first.

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