If you’re a small business owner, there’s a good chance that you rent commercial property or lease office real estate to run your business.
However, even if you don’t own the property, you’re still liable for incidents that occur on the premises—no matter how unexpected.
That’s where business renters insurance comes into play. In this post we will cover how much renters insurance costs for a small business and how business renters insurance works in 2022.
How Much Is Business Renters Insurance Per Month?
The average monthly cost of business renters insurance is around $94 per month or $1,128 per year and based on a business owners plan or (BOP), that combines liability and property coverage for your business at one low cost.
What Does Business Renters Insurance Cover?
Specifically, this type of insurance covers damages to the:
Additionally, in many cases, landlords will refuse to rent to you unless you present proof of business insurance.
How Does Business Renters Insurance Protect Your Business?
Business renters insurance prevents you from being held liable for monetary damages that occur on the property that you rent, including as a result of accidents, theft, workers’ compensation, property damage, and more. It also protects your company's belongings.
What Is Business Renters Insurance?
“In Plain English,” business renters insurance is a type of insurance that small business owners purchase when they rent or lease a space that they do not own. It is separate from the insurance that the property owner has for the actual building.
Although you may already possess other types of business insurance, such as workers’ compensation, those forms of insurance might not cover property damage or medical bills resulting from accidents or other unanticipated incidents on your property.
Types of Business Renters Insurance
However, not all forms of business renters’ insurance cover the same things. They offer varying degrees of coverage regarding liability, property damage, and other considerations.
Business Liability Insurance
General liability insurance, also known as ‘slip and fall insurance,’ remains one of the most common coverage choices in the business world. It covers many situations, including certain types of property damage or falls involving third-party entities, such as guests, clients, or staff.
For example, if a customer falls in your nail salon and injures themselves, liability insurance may cover the customer's medical bills. It may also cover the cost of any legal fees should the customer file a lawsuit against you and/or your employees.
Business Property Coverage
Business property insurance coverage is (almost) exactly as it sounds — you'll receive compensation or reimbursement if your company's belongings get damaged or stolen during an incident such as a break-in or a fire.
While the landlord’s insurance may cover damages to your physical building — such as broken glass or smashed doors — it will not typically cover any belongings or valuables within the workplace that you or your employees own. Typical items covered under this policy include:
There are two types of coverage within property insurance: actual cash value (ACV) and replacement cost policy.
Replacement Cost Policy
The replacement cost policy covers the full amount to replace or repair items in your business that have been damaged, destroyed, stolen, or lost during an incident covered by your policy. However, as a tradeoff for getting your items fully covered upfront, you'll also have to pay a higher premium.
Actual Cash Value (ACV)
This form of insurance does not automatically cover the cost of your items. Instead, it reimburses you for stolen and lost items and property damage after deducting how much your assets have depreciated. Therefore, you get a reduced amount of coverage with ACV, but your premium will also be lower.
Business Owners Policy (BOP)
A business owners policy (BOP) packages together property insurance and liability insurance. A BOP covers:
I would recommend that you purchase a BOP if you are renting space for:
Which business renters’ insurance Policy is best for me?
To assess which one is best for your company, you’ll need to determine your company’s risk level. If your business is low risk, you may want to get general liability coverage to cover the basics in case accidents occur.
If you also want to cover property damage, then a more comprehensive BOP may make more sense. Despite the increased cost, you'll have greater peace of mind while knowing that your business will be protected in nearly all circumstances.
How Long Does It Take to Get Approved for Coverage?
You can easily obtain business renters insurance quotes either online or by calling a local insurance agent through your preferred insurance company.
From there, it’s a short process to getting approved for coverage—it can take anywhere from a few minutes to a few hours.
If you already have an insurance company that you use for your home or business, you should be able to update your policy coverage to include business renters insurance.
Most companies can update your policy within 24 hours of your request online.
Once you review, accept, and purchase the policy that your insurance company offers, they can typically send over proof of insurance right away.
As we’ve mentioned, many commercial landlords will only rent to you if you purchase business renters insurance, similar to a residential landlord who will not rent to tenants without renters insurance.
Even if you’re not legally obliged to purchase business renters insurance, it’s still a sound financial decision. If you don't already have coverage then you can click here to get immediate quotes and to get covered.