What is Business Renters Insurance, and Do You Need it?

business renters insurance

You should buy small business renters insurance if you rent an office space or another type to run your enterprise. This kind of small business insurance protects your operations, team and covers property damage.

What is Business Renters Insurance?

A business owner can get this insurance coverage through a Business Owner’s Policy (BOP). These combine three different types of insurace.

  • General Liability
  • Commercial Property Insurance
  • Business Income Insurance

Protect your business even if you’re renting a space because BOPs cover commercial property coverage. A small business gets financial protection from lawsuits, theft, and fire. Plus lost income if the property is covered.

Read More: Types of Business Insurance

business renters insurance

Why You Should Have a Business Renters Insurance Policy

Business renters insurance protects small businesses from unexpected events, and issues like property damage. There are several other reasons why this renters insurance is a must-have.

  • For Coverage When Employees Damage a Rented Space – There are certain risks other types of business insurance coverage don’t provide. Standard policies don’t look after damages workers make to inventory or a warehouse.
  • Your Contracts Might Require A Business Renters Policy – Maybe you’re renting from your landlord. Loan agreements even require a renter’s insurance policy.
  • To Cover Damages Made By A Third Party – A business owner should be aware of the difference between actual cash value versus replacement cost.
  • For Coverage From Accidents Leading to Lawsuits – Small business renter’s insurance should cover this, make sure. It might not be covered by a standard business insurance policy.
  • It’s The Law – Small business renters insurance is required in most states. Without it, your business can face losses due to legal actions, fires and theft.

What is Covered by Business Renters Insurance?

A business owner’s policy like this provides coverage for natural disasters and lawsuits pertaining to bodily injury. Remember when you’re looking for any type of insurance coverage, you should really get a customized quote. Lots of companies have convenient tabs where you can find an agent too.

This insurance covers the following as well:

Professional Liability Insurance

In the dynamic landscape of business, accusations of negligence or causing harm can arise unexpectedly. That’s where Professional Liability Insurance steps in, offering businesses a safety net against such legal claims.

Commonly known as errors and omissions insurance, this policy bridges the gap that general liability insurance might leave. While a general liability policy offers a broad range of protections, it may not necessarily cover professional missteps or oversights.

For contractors, it’s advisable to delve into completed operations coverage, which, although often part of general liability insurance, is paramount for their line of work.

On another note, advertising injury coverage is generally bundled with commercial general liability policies. This vital addition ensures that businesses are safeguarded against potential pitfalls like unintentional copyright violations or instances of slander.

business renters insurance

Business Interruption Insurance

When unexpected events such as natural disasters strike, they can halt business operations, leading to lost income.

Business Interruption Insurance is designed to shield businesses from these unforeseen pauses, covering lost revenue due to incidents like theft, fire, or wind damage.

With this policy in hand, businesses can navigate through challenging times, ensuring that they remain financially stable even when operations come to a standstill.

Workers Compensation Insurance

Almost every state mandates the implementation of Workers Compensation Insurance, highlighting its importance in the business ecosystem. This policy acts as a safety blanket for businesses, covering them against expenses stemming from work-related ailments or injuries.

From compensating for lost wages to managing medical expenses, this insurance ensures that employees are well taken care of. It’s not just a matter of legal compliance; many landlords may require businesses to have this coverage in place.

As an essential component of a company’s insurance portfolio, Workers Compensation Insurance underscores a business’s commitment to its employees.

It addresses the inevitabilities of the workplace, be it accidents, disabilities, or illnesses. And for comprehensive protection, integrating liability coverage is a must.

business renters insurance

Commercial Auto Insurance

For businesses that are anchored in distribution or transportation, Commercial Auto Insurance is non-negotiable. This policy encompasses the protection of business-owned vehicles, ensuring that they’re covered against potential damages or liabilities.

Whether it’s a fleet of trucks or a single company car, this insurance guarantees that the wheels of business keep turning, regardless of unforeseen roadblocks or accidents.

Investing in Commercial Auto Insurance underscores the importance of safeguarding assets that play a pivotal role in a company’s operations

Comparison of Key Business Insurance Coverage

For a quick glance at the various insurance coverages and what they entail, refer to the comparison table below. It will help you discern the differences and understand which policies might be the most pertinent to your business needs.

Type of InsurancePurposeTypically CoveredNot Typically Covered
Commercial Property InsuranceProtection against physical damage or loss.Theft, Fire, Certain Natural DisastersFloods, Earthquakes
Business Income InsuranceReplaces lost income due to a covered event.Income loss due to fire, theft, etc.Income loss due to non-covered events.
Professional Liability InsuranceProtection against negligence claims.Claims of professional negligence.Intentional malpractice.
Business Interruption InsuranceCovers lost income due to events interrupting operations.Lost income due to wind theft, fire, etc.Lost income due to non-specified reasons.
Workers Compensation InsuranceCovers work-related illnesses and injuries.Medical costs, Lost wagesInjuries outside of work.
Commercial Auto InsuranceCovers business vehicles.Damages to business vehicles.Personal vehicle damages.

business renters insurance

Read More: Business Insurance Benefits

What is Not Covered by Business Renters Insurance?

This type of business policy doesn’t cover everything your small business might need. Here’s what your business won’t get with these policies.

  • Coverage for Pests – Bugs are for the landlord’s insurance company to tackle. Most small business renter’s insurance coverage doesn’t cover damage caused by pests.
  • Negligent Damage – Likewise for building damage caused by criminal activity or negligence. You won’t get coverage under those circumstances to protect your business.
  • Floods – Coverage for property damage caused by water is under a flood policy, not small business renters insurance. Ask your insurance company about this distinction.
  • Earthquakes – Professional services and other business renters don’t get coverage automatically. But there could be an add-on to your business owner’s policy.

Remember that small business renters insurance should bundle options. An insurance professional and the insurance company should be able to customize solutions for you.

How Much Does Business Rental Insurance Cost?

Small business owners are usually concerned with the bottom line. Like how much good business renters insurance costs. Remember a good policy combines liability insurance and commercial property insurance. And general liability policies.

There are additional endorsements you can add to renters insurance like a policy for errors and omissions coverage. And other insurance products you might need too. Here’s the bottom line. Business renters insurance should provide coverage mirroring BOP insurance.

An insurance professional can estimate the average cost of one of these BOP policies. That’s usually around $1200 annually for good renters insurance. What you pay might be different depending on several factors. Like the type of property your business is on.

There are many different casualty insurance company choices. Read on to find out how to find the one that supplies good business renters insurance.

How to Choose the Right Business Rental Insurance Company

Finding the right company is a big part of getting business renters insurance coverage. A good insurance company offers income insurance, commercial property insurance and others.

There are several things you can look for to start a search. Make sure that you can bundle policies with any of the companies you are considering. Chances are you’ll need to customize the coverage to get the best deal. While you are at it find out what’s not covered, this can be just as important as finding out what is.

Every company supplies policies that have these exclusions. You need to find out what they are at the beginning. Review your needs before you start any search. Knowing what your business renter’s coverage requirements are is essential. So, you should be reviewing them on a yearly basis.

Here’s how to choose a company that works with your risk management strategies.

  • Go right to the insurance company for insurance policies. Do some research. Then build a business policy that suits your needs. Tweak the services to get a customized policy, like one covering the property. And then get a custom quote so you only pay for what you’ll use.
  • Get coverage online. Compare services from different providers this way.
  • Contact an insurance broker to cover your business activities with the right insurance. It needs to cover everything from policies for professional liability to property coverage where applicable. Looking through these financial products on your own can be confusing. A broker isn’t cheap, but they can guide you through the process.
  • Understanding the risks in your industry helps. That can guide you to the right insurance. For example, product liability insurance works best for restaurants.
  • Learning what affects your insurance rates is critical. Don’t let a business owner’s policy lapse. That will increase the premiums on items like professional liability insurance.

Assessing Your Business’s Risk Profile for Renters Insurance

  • Understanding Risk Exposure: To determine the appropriate level and type of renters insurance, businesses must first understand their unique risk exposures. This involves assessing various aspects of their operations, such as location, nature of business activities, and customer interaction.
  • Industry-Specific Risks: Different industries face distinct risks. For example, a tech company might prioritize data breach coverage, while a retail store might focus more on property damage or theft. Assessing risks relevant to your industry is crucial.
  • Location-Based Considerations: The location of your business can significantly impact your insurance needs. If you’re in an area prone to natural disasters, such as floods or earthquakes, you might need additional coverage. Urban locations might require higher coverage for theft or vandalism.
  • Analyzing Business Operations: Evaluate your daily operations to identify potential risks. Do you handle sensitive customer data? Do you have expensive equipment? Do customer interactions pose potential liability issues? These factors will guide you in choosing the right coverage.
  • Consulting with Professionals: An insurance agent or broker specializing in commercial policies can provide valuable insights. They can help identify risks you might have overlooked and suggest appropriate coverage options.

Legal Implications and Compliance for Renting Commercial Spaces

  • Understanding Lease Requirements: Many commercial leases include clauses regarding insurance requirements. It’s essential to understand these stipulations to ensure compliance and avoid potential legal issues.
  • Local Regulations: Different jurisdictions have varying requirements for businesses operating in rented spaces. These might include specific types of insurance coverage or minimum coverage amounts. Familiarize yourself with local laws to ensure your insurance policy is compliant.
  • Liability Concerns: Renters insurance can also protect against legal liabilities. For instance, if a customer is injured on your property, having adequate coverage can save your business from costly lawsuits and settlements.
  • Documentation and Record-Keeping: Maintain thorough records of your insurance policies and ensure they are easily accessible. This practice is not only helpful for compliance but also crucial when filing claims.

Frequently Overlooked Coverages in Business Renters Insurance

  • Business Interruption Extensions: While property damage is often a primary focus, the impact of business interruptions can be equally significant. This coverage can compensate for lost income during periods when your business is unable to operate normally due to covered damages.
  • Electronic Data Protection: In the digital age, protecting electronic data is vital. Many standard policies may not cover data breaches or loss of digital assets. Including electronic data protection can safeguard against these modern risks.
  • Seasonal Inventory Coverage: For businesses with fluctuating inventory levels, such as retail stores, it’s essential to adjust coverage to reflect these changes. Seasonal coverage ensures that your insurance aligns with inventory levels at different times of the year.
  • Employment Practices Liability Insurance (EPLI): This covers claims from employees alleging discrimination, wrongful termination, harassment, and other employment-related issues. Given the rise in employment-related lawsuits, EPLI can be a critical addition to your policy.

Each of these overlooked coverages addresses specific risks that might not be immediately apparent but can have significant financial implications. Tailoring your renters insurance to include these coverages ensures comprehensive protection for your business.

business renters insurance

Best Small Business Rental Insurance Providers

Effective business insurance coverage needs to come from industry-leading business partners. The top American companies for a good renter insurance policy are listed below. Remember to look for standards like liability insurance from any insurance company you’re considering. Take a look at the testimonials on their websites. These are good indicators of the company’s credibility.

The Hartford

This is a well know casualty insurance company. Their business renters insurance works better than the competition because their owner’s policy is trusted. Get customized property insurance for different types of businesses. They also supply excellent worker’s comp policies.


The insurance cover you can get here is outstanding. Add commercial property, liability, and business interruption. Then you can get international coverage.

State Farm

There’s a handy tab to find a local agent. They support different types of businesses like restaurants and retailers. Their insurance for general liability comes in $1 million increments. Property insurance is available too.

There’s no login required for this company. And you can get a certificate of your insurance right on their website. They look after a variety of small businesses like drugstores and bakery locations as well as online sales businesses, contractors and trades too.


Pay for a short-term liability insurance policy and protect property and data with cybersecurity insurance. This insurance company offers general liability insurance too.

This is a company that has a 100-year history of making sure businesses have good coverage. There are 3,000 employees in 14 different countries and customers right across the globe.


They supply different types of insurance. Like liability insurance for different types of business, they offer commercial auto insurance with collision. And actual cost value when you need to replace property equipment breakdown is a covered loss. You’ve got insurance cover for errors and omissions too, and of course general liability insurance. They also provide resources and tools for smaller businesses and you can pay your bills online through their website. Nationwide has more than 90 years of business experience.

Understanding business renters insurance and how it works can help you concentrate on making profits. Other business insurance products can also fold into a renter’s policy.

Image: Depositphotos

More in:

Rob Starr Rob Starr is a staff writer for Small Business Trends and has been a member of the team for 7 years. He is a graduate of Ryerson University in Toronto with a Bachelor of Journalism degree. His print credentials include employment with various Toronto area newspapers and three works of fiction: The Apple Lady (2004), Creekwater (2006) and Sophistry By Degrees (2008) published by Stonegarden Press In California.