You’ve been eyeing an available retail storefront, office, or warehouse to rent or lease that meets your small business’s needs and inquire about it. As you review the lease terms, you discover it states you must have a valid business tenant insurance policy. That’s not unusual.

A commercial property landlord typically requires any small business owner who wishes to rent or lease their space to carry what’s known as a business tenant insurance policy. This policy is designed to pay for damage or loss to a rented space that a business tenant causes. Essentially, it protects both you as the lessee and the property owner.

Sometimes called commercial tenant insurance or tenant legal liability, it’s a form of commercial general liability (CGL) insurance that effectively covers the cost of claims or lawsuits related to your company’s regular activities. Some insurance providers may include tenant legal liability in a CGL policy, but not always. It can be purchased as a standalone policy.

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Business Tenant Policy Coverage Basics

Business tenant insurance, also called commercial tenant insurance or tenant legal liability insurance, is a type of general liability coverage for small business owners who rent or lease a commercial property. It covers them for the cost of damages to the property they rent or lease.

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Why Does a Business Tenant Insurance Policy Matter?

The landlord or property owner you lease a commercial space from will want to know you’re insured against liabilities ranging from third-party bodily injuries and property damage to your customers who visit your location and any damage to the landlord’s premises. 

For instance, if one of your employees accidentally starts a fire that damages the property or if one of your customers is injured while in your workspace, your business tenant insurance policy shields the landlord from the cost of those damages by indemnifying them. That policy also protects you from paying for those costs – which could easily run into thousands of dollars.

However, be advised that if damage inflicted on a commercial space you’re leasing is determined to be intentional or results from a wrongful act by you or your employees, your policy will not pay for those damages.

Does a Business Tenant Insurance Policy Cover My Contents?

As extensive (and necessary) as business tenant insurance is, it doesn’t cover your small business for everything. There are optional coverages you can include to enhance your policy, including:

  • Commercial property insurance to protect your business contents and furnishings, including the electronics and computing devices your company owns and uses.
  • Business interruption insurance is often included in commercial property coverage, but you can add it to your policy if it isn’t. It’s designed to pay for your business’s overhead costs if you are forced to close while repairs to the property are ongoing following an insurable loss (like a fire or flood).
  • Errors and omissions (E&O) insurance, or professional liability insurance, is essential for any business that provides advice or services to its customers for a fee. For example, if you’re a consultant, the advice or service you provide to a client could be misinterpreted and lead to a negligence claim or a lawsuit.
  • Product liability insurance may be included in your general liability coverage, but it varies by the insurance provider. Ask your Zensurance broker to add it to your policy if you manufacture, distribute, or sell products (including food).

Getting the Coverage You Need With Ease

Purchasing the business tenant insurance protection you need to secure that commercial space you want to call your small business’s home is quick, easy, and affordable through Zensurance.

Fill out an online application to get a free quote. With more than 50 insurance providers in our partner network, we can get you insured in just a few clicks. Plus, our licensed brokers can advise you on what your policy limit should be as well as any additional coverages you might need based on your business’s profile.

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About the Author: Matt Jardine

Matt Jardine is a licensed insurance broker and Team Lead, Property & Hospitality, at Zensurance.