Commercial property insurance (also known as business buildings insurance) helps keep the bricks and mortar of your business safe.
It works just like the buildings cover on your home insurance – if there’s unexpected damage to the structure of any building your business owns, your insurer will cover the cost of repairs.
In the UK, a commercial property is any property or land used for business purposes rather than as a living space.
Essentially, if a property is used to generate income or support a business, it’s considered a commercial property.
Offices
Shops
Warehouses
Factories
Hotels
Restaurants
Cafes
Land used for development or investment
There is no legal requirement to have commercial buildings insurance. However, some key reasons business owners purchase it are:
If your business property is damaged it prevents you from having to cover costly repairs out of your own pocket
It provides financial protection if your business property is damaged, preventing you from having to cover costly repairs out of your own pocket
It can fulfil lender requirements – for example, if a mortgage provider insists you have commercial property insurance
It helps to ensure business continuity by assisting with repairs and getting your premises back up and running if it’s damaged
It protects you against loss of rent if this is part of your business model – for example, if you’re a commercial landlord and tenants have to move out while repairs are completed
It provides peace of mind that you won’t be hit with unexpected costs, and that your business can still operate even if the unexpected happens
Commercial property insurance keeps you protected against a range of risks – but not everything is included. Here’s what a good policy should cover:
Natural disasters like flooding, storms, and subsidence
Any damage to your building from fire
Deliberate vandalism, including from break-ins, arson, burglary, or rioting
Accidental damage – as long as it isn’t considered negligence
Damage caused by burst pipes on your property
If you’ve lost income as a result of the damage you can claim it back
Damage to an unoccupied building (usually 30 days without occupancy)
Damage caused by negligence, for example, failing to fix a known leak, ignoring safety hazards, or not securing the premises properly
Damage resulting from poor craftsmanship
Damage from pests and other animals
General wear and tear
There’s no one answer – the cost of commercial property insurance is determined by different factors.
Here’s what goes into the price you’ll pay:
A bigger business will naturally have more to cover – and more at stake if cover isn’t in place. Larger premises, higher footfall, and more valuable equipment or stock can all increase the level of cover needed, which leads to higher premiums.
To work out rebuild costs, insurers factor in risks such as flood zones and area crime rates, and consider size construction materials, specialist features, labour and material costs, and accessibility for builders and emergency services.
If you operate across multiple sites, for example, a chain of shops or both an office and a warehouse, each location is evaluated on its own risk profile. Some may be cheaper or more expensive to insure depending on their size, purpose, and location-specific risks.
To get a commercial property insurance quote, insurers will ask a series of questions to understand your business and the property you want to insure. They’ll usually ask about:
Your personal details
The nature of your business and what happens on the premises
The level of cover you need
Whether you have any employees
Your claims history
Key details about the property, such as its construction, security features, and occupancy
This information helps insurers determine which policy is right for your business and set an accurate premium.
It’s important to answer these questions correctly and honestly. Providing incomplete or inaccurate details can lead to:
Incorrect pricing, meaning you might pay more than necessary or end up underinsured
Delays or complications during a claim, if the insurer discovers discrepancies
In serious cases, a claim being reduced or refused altogether
Being precise upfront ensures you get the right level of protection and avoids problems when you need your cover most.
“Nobody wants to think about their business premises being seriously damaged, but unfortunately, incidents do happen and can be financially devastating.
The British Fire Industry Association estimates that a fire at a business property costs an average of £657,074 to the company, with 43% of this cost being due to building damage. Flood damage, another significant threat, costs affected businesses a smaller but still significant £82,000 on average. Such costs can be crippling, particularly to small businesses.
Fortunately, commercial property insurance can be purchased for a fraction of this cost, making it a very worthwhile investment, should the worst happen.”
Katie Bishop Insurance writer
If you need commercial property insurance you may also require:
Business contents insurance protects equipment, including in home offices.
Employers’ liability insurance protects you if your staff become ill or injured at work.
Public liability insurance protects you if your work harms members of the public.
Product liability insurance covers legal fees if your product causes injury to a customer.
Legal expenses insurance covers legal fees and offers legal and tax support services.
Professional indemnity insurance protects you if you are accused of negligence.
Business van insurance protects your work vehicle and its contents.
Tool insurance covers costs if your tools are stolen, damaged, or lost.
Key person insurance offers compensation if a key employee becomes unable to work.
Usually not. Business buildings insurance is designed for commercial premises, so it generally won’t apply to homes used as your main workspace.
If you only work from home occasionally or in a hybrid role, your standard home insurance may cover this but you should still tell your insurer. If your home is the primary base of your business, you’ll likely need home business insurance or extra cover for equipment, stock, or any clients who visit.
Using an outbuilding, shed, or garage for business purposes isn’t always covered either, especially if it contains valuable tools or stock.
To avoid problems at claim time, always tell your insurer if you:
Work from home regularly
Store business equipment or stock
Use an outbuilding for work
Have clients or deliveries related to your business
Handle sensitive data or use specialist machinery
Being clear upfront ensures you get the right cover and don’t unintentionally invalidate your policy.
Most commercial property insurance includes loss-of-rent cover, which can pay for rental income lost if your building is damaged and tenants cannot use it. To claim, insurers usually require that:
The damage is caused by an insured event (fire, flood, storm, vandalism)
The premises are officially deemed unfit for use
The loss of rent is directly linked to the damage, not tenant financial issues
Fire, flood, storm, or vandalism making the property unusable are all usually covered.
However, tenants defaulting on rent, choosing to leave, or the property being vacant without notice, aren't typically covered.
Always check your policy terms so you understand when loss-of-rent cover applies
Yes, many policies include loss-of-rent cover if the building becomes unusable due to an insured event like fire, flood, or storm. Standard cover usually has limits on rent paid and a maximum indemnity period (e.g., 12–24 months) and does not cover tenant defaults.
You can often add optional extensions to increase limits, extend the indemnity period, or cover additional perils. Always check your policy to see what’s included and whether an add-on is needed.
Yes, but it’s different from standard loss-of-rent cover. Loss-of-rent insurance only pays if tenants cannot use the building due to damage from an insured event (fire, flood, storm). It does not cover tenants leaving voluntarily or defaulting on rent.
To protect against income loss when tenants leave unexpectedly, you may need business interruption insurance or a rent guarantee policy. This can cover lost rental income for a fixed period or until you re-let the property.
Business interruption insurance is most suitable if your income depends heavily on tenants and you want financial protection while finding new occupants. Always check policy terms to understand limits and eligibility.
No, most commercial property insurance policies limit cover for unoccupied buildings, often to around 30 days, because empty properties are at higher risk of damage.
Insurers typically require you to:
Secure the property with locks, alarms, or shutters
Carry out regular inspections to check for leaks, vandalism, or other issues
Maintain utilities like heating to prevent frost damage
If you plan to leave a building empty for longer than the allowed period, you may need specialist unoccupied property insurance, which is designed to cover vacant premises and can include adjusted terms, higher premiums, or stricter security requirements.
Always check your policy and notify your insurer if the property will be empty.
Yes. Mixed-use or multi-property landlord insurance lets you combine cover for both commercial and residential properties under a single policy.
Pricing and cover differ because insurers assess each part of the property separately:
Residential units are priced based on tenant type, property size, and contents cover
Commercial units are priced based on business type, risk of damage, and potential loss of income
Common mixed-use scenarios include:
A shop on the ground floor with apartments above
A café with a self-contained office above
A small warehouse with a live-in caretaker’s flat
Combining them in one policy can simplify administration, but premiums and cover limits will reflect the different risks of commercial and residential use.
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Reviewed on 18 Dec 2025 by
