Insurance Obligations for Commerical Tenants | LegalVision UK (2024)

FAQs

Is tenant liability insurance mandatory in the UK? ›

Tenants' liability insurance isn't a legal requirement in the UK. Some landlords and letting agents may expect you to have tenants' liability cover when you sign a rental agreement – especially if the property is furnished – but they can't insist on it.

A fundamental right that you, as a commercial tenant, usually enjoy is the right to exclusive possession of the commercial premises on the lease demise. This means you have the right to sole occupation of your business premises, so you do not have to share it with any third party, including your commercial landlord.

There's no legal obligation for a landlord to take out a dedicated insurance policy. However, a conventional home insurance policy won't cover you for rental activities, and if you have a mortgage on your property it's very likely that your lender will require you to take out insurance before you take on tenants.

The law requires that landlords repair exterior damages to the property. This includes peeled paint, clogged drains and gutters, roof leaks, etc. they are to also take care of the interior. Regular inspections and repair installations for the supply of water, electricity, and gas.

You must get Employers' Liability (EL) insurance as soon as you become an employer - your policy must cover you for at least £5 million and come from an authorised insurer. EL insurance will help you pay compensation if an employee is injured or becomes ill because of the work they do for you.

Renters insurance can help you repair or replace property after loss due to many types of damage or theft. It can also provide coverage for an accident at your residence. Policies usually have very affordable annual premiums.

Commercial tenants may have the protection of the Landlord and Tenant Act 1954. The Act grants Security of Tenure to tenants who occupy premises for business purposes. The tenancy will continue after the contractual termination date until it is ended in one of the ways specified by the Act.

The responsibilities of landlord and tenant will be clearly set out in the lease. Normally commercial landlords are responsible for any structural repairs such as foundations, flooring, roof and exterior walls, and tenants are responsible for non-structural repairs such as air conditioning or plumbing.

Statutory Demand and Insolvency

A Statutory Demand may be served on the tenant and if payment is not made within 21 days, the landlord may be entitled to present a bankruptcy or winding up petition. There are limitations to this course of action and it may not necessarily be effective in recovering the debt.

No, it isn't compulsory to have tenants' liability insurance if you're renting in the UK. Although it might be a requirement of your landlord or letting agency, particularly if you're renting a furnished home. Either way, it's worth considering taking out this cover to protect yourself from any unexpected costs.

Who pays building insurance, landlord or tenant in the UK? ›

It is the responsibility of the Landlord/Freeholder/Property Owner. A commercial tenant IS however responsible for arranging their own business insurance including cover for any of their own business contents, fixtures or fittings within the commercial property they rent.

Landlord insurance is cover that protects landlords from risks associated with their rental property. It usually includes buildings and contents insurance, but can also include landlord-specific covers such as property owners' liability, loss of rent, and tenant default insurance.

You're responsible for repairing any of your own appliances such as a washing machine, or anything that you had installed, such as a shower. If your landlord supplied any electrical appliances, they are responsible for maintaining them and your tenancy agreement may give more information about this.

If your property needs repairs or has mould

Your landlord should tell you when you can expect the repairs to be done. You should carry on paying rent while you're waiting.

In the UK, there is no specific law that requires landlords to replace carpet on a regular basis. However, landlords are required to provide a safe and habitable living environment for their tenants.

The type of liability insurance you need depends on many factors, from your employment status, to your industry, to the country you live in. In the UK, for instance, it is relatively unusual to take out personal liability insurance as an independent cover, however, it is included within many insurance packages.

How much you pay for renters insurance will depend on several factors, including where you live and how much cover you want. But 51% of people who used Compare the Market found home contents cover for less than £64. 51% of our customers were quoted less than £63.57 for their contents home insurance in March 2024.

Buildings insurance isn't compulsory but it is advisable. Think about how you would afford to rebuild your house if it were damaged or destroyed.