Business Renters Insurance: What It Covers, Who Needs It
Here's how business renters insurance works, which businesses need it and how much it costs.
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There's not an insurance policy called "business renter's insurance." Instead, businesses who rent their space should probably get a business owner's policy.
This insurance package includes:
- General liability insurance: Protects your business from customer and third-party claims involving bodily injuries, property damage your business causes in a rented space (not one you own) and advertising and reputational injuries. Landlords often require this coverage.
- Commercial property insurance: Protects your business from losses as a result of theft and damage that results from fire and natural disaster. Your landlord might require this, too.
- Business interruption insurance: Covers the money your business loses while you recover from a disaster, like a fire, vandalism or storm.
By bundling insurance into a BOP, you’ll only have to pay one premium and can save on costs.
Save up to 30% on business insurance
NerdWallet Small Business helps you get real-time quotes from 30+ insurers, and instant access to your Certificate of Insurance (COI) through our partner, Coverdash.
Best business renters insurance companies
These companies all sell business owner's policies. You can get a quote online from all of them, and some even let you buy your coverage online.
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Chubb
Chubb offers impressive coverage for businesses with international interests with a customizable business owner's policy. It also offers a significant number of enhancements that you can add to create coverage for exactly what your business needs. In particular, Chubb offers extra expense coverage, property enhancements, earthquake coverage (in certain states), equipment breakdown and crime coverage. Businesses with under $2 million in annual revenue can buy a policy online. Read review.
The Hartford
The Hartford is known for its BOP, which includes general liability insurance and commercial property insurance and business income insurance. This policy is designed to protect your business and spaces you own or rent from fire, theft, lawsuits and more. It's also customizable and you can easily add data breach insurance or professional liability insurance to expand coverage. You can get a quote online. Read review.
Hiscox
Hiscox provides insurance for a variety of small businesses and offers options to customize a BOP. Hiscox gives you the option to customize your policy by adding office insurance for fire and business interruption, electronic data loss insurance, hired or nonowned vehicle liability insurance, commercial crime insurance and terrorism coverage. Most businesses can buy coverage online. Read review.
Who needs business renters insurance?
Any business that rents property for its operations — whether it’s an office, storefront or warehouse — should have business insurance.
Many landlords require businesses to show proof of insurance to rent their space. They should specify what your insurance needs to cover and which policies they expect you to have.
What does business renters insurance cover?
We recommend most renters buy a business owner's policy. This protects your business against claims like:
- Damage you or your employees make to the space.
- Damage or theft by a third party.
- Damage to or theft of any equipment, inventory or property you store within the space.
- Damags to the property as a result of fire, natural disasters and other unexpected events.
- Accidents or injuries that occur in the space that lead to a business lawsuit.
You might also need additional types of insurance. For example, if you own a manufacturing business and are renting a warehouse to store equipment and inventory, make sure your insurance covers damage or loss to the inventory and equipment stored there. Inland marine insurance covers property you keep offsite.
Save up to 30% on business insurance
NerdWallet Small Business helps you get real-time quotes from 30+ insurers, and instant access to your Certificate of Insurance (COI) through our partner, Coverdash.
How much does business renters insurance cost?
If you choose a business owner's policy, the median cost is $57 per month or $684 per year, according to insurance marketplace Insureon.
The cost of business insurance depends on a variety of factors, including business size, equipment, number of employees and location. The larger your company is and the more exposure you have to certain risks, the higher rates will be.
Replacement cost vs. actual cash value
Business property insurance policies determine the value of your items — and how much they'll pay out in case of a loss — using one of these two methods.
- Replacement cost method: Insurance will cover the cost of restoring or repairing property to the original state, including labor, materials or actual property replacement.
- Actual cash value method: Insurance will pay to repair or restore damaged or lost property but will deduct some of the cost to account for depreciation. You’ll receive compensation for what the property is worth at the time of the claim, as opposed to when it was originally purchased.
Replacement cost commercial property insurance is more expensive than actual cash value coverage. But if you have expensive equipment or inventory that will be tricky to replace, paying for it may be worthwhile.
How to get business renters insurance
There are three ways to find the right insurance policy for your business:
- Work with an agent or broker: Navigating different insurance policies and providers can be complicated. By using an insurance broker or agent, you can take advantage of that individual’s experience and connections to find the coverage you need.
- Use an online marketplace: If you want to quickly and easily compare multiple providers and what they have to offer, you can use an online marketplace like Simply Business to gather multiple quotes quickly.
- Go straight to an insurance company: You can research different insurance companies and work with them directly to build a policy that fits your needs. With this method, get a quote from several providers to find the best and most affordable option.
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