Insuring Leased vs. Owned Commercial Buildings: What’s the Difference?

Whether you lease or own a commercial building significantly impacts your insurance responsibilities. Overlooking the differences can lead to costly gaps in coverage.

Insurance for Leased Commercial Buildings

If you lease a commercial space, your landlord typically insures the building. However, you’re responsible for insuring your business’s contents, equipment and liability. Most landlords require tenants to carry general liability insurance and name them as an additional insured. You may also need tenant improvements and betterments coverage if you’ve upgraded the space.

Insurance for Owned Commercial Buildings

Owning a commercial building means you’re responsible for insuring the structure and its contents. A commercial property insurance policy typically covers damage from fire, storms, vandalism and other risks.

Liability coverage can help pay for third-party property damage and injuries for which you are responsible. Depending on your business type, you might consider additional policies like business interruption insurance or equipment breakdown coverage.

Key Differences and Considerations

The main difference lies in who is responsible for the building. Tenants focus on safeguarding their business operations within the space, while owners must financially protect the entire property.

Regardless of ownership, both parties should regularly review their policies to maintain appropriate coverage as business needs evolve.

Learn More

Contact Garlesky Insurance Agency today for a personalized coverage assessment and a quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.