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Whether it’s your first business premises or you’re just moving to new premises, signing a new lease is a big moment for any business.
It will be a very busy time too. In the lead up you will have spent many hours finding and choosing your new premises, and then you’ll need to start planning the big move.
One thing you’ll need to sort out before the lease agreement can be finalised is your insurance.
Insurance requirements
Most standard lease agreements for a commercial premise will include the requirement for two forms of insurance:
- Public liability
- Glass
It’s all good and well to know what the requirements are, but if you’re spending your company’s hard earned money you want to know what you’re actually paying for.
So what are these two insurances, and how much are they going to cost you? Let’s take a look at each of them in more detail.
Public liability
Virtually all businesses should carry public liability insurance regardless of whether or not you operate from your own premises.
From a business perspective, it protects you in the event that your business activities cause property damage or personal injury to another person.
The policy will also cover your business if someone injures themselves whilst on your premises. In this case we’re often talking about slip-and-fall type incidents.
This is why your lease will require public liability, as the landlord wants to know that if someone injures themselves on the premises their costs are going to be covered.
The good news is that a single public liability policy will cover your business activities as well as the premises you operate from. There is no need to hold separate policies.
If you already hold a policy for your business, you simply have to note the address of the leased address on your policy.
Glass
All lease agreements will also require that the glass option is included on the insurance policy.
The glass option covers any fixed glass within your premises. At a minimum this will cover the fixed glass that forms part of your actual premises.
It can also include any fixed glass shelving, mirrors or display cabinets that you bring in to the premises, offering increased coverage for little additional cost.
Documentation
The property manager or leasing agent will require documented evidence of the insurance being in place.
This can be done via a certificate of currency, which is generally considered to be the standard in terms of providing proof of insurance.
Any insurance broker will be able to provide you with this certificate once the cover is in place, however some may require that the policy is paid for before they will issue the certificate.
If for any reason you do not proceed with the lease and you have already paid for the insurance, generally you will be able to cancel and receive a full refund provided that you are still within the cooling-off period.
Optional covers
Whilst public liability and glass are generally the only two mandatory forms of cover when taking out a lease on business premises, there are other forms of insurance worth considering.
First of all you need to look at insuring whatever you’re going to putting into the space.
For a shop this could be your stock, for an office it might be desks and computer equipment, or for a factory it may be plant and machinery.
Whatever you keep on your business premises it’s important to ensure that it is properly protected.
Another important form of cover is business interruption. For more information on this and other covers we recommend using a qualified broker.
Get in touch with us and we’ll point you in the right direction, regardless of whether you just want a quote on the minimum requirements or a full business insurance package.