Office Renters Insurance Sound Like a Waste of Money. But is it?

November 21, 2018 in BUSINESS

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Starting a successful business can be both exciting and daunting. There’s so much to look forward to on the horizon, but how will you get to where you need to be in 6 months, 1 year, 2 years? There are often many startup expenses that come with implementing a successful business model, but one that is often overlooked, or even deemed not important, is office renters insurance. Is this something that you need?

The answer, as with most in this world, is that it depends on a variety of factors. Firstly, many managed office locations, such as executive suites and coworking spaces, offer all-inclusive pricing models that includes office renters insurance. In these spaces physical damage is pretty much covered, save anything extreme like blowing up a wall or accidentally setting the room on fire (unless it includes fire insurance). If you choose this type of space for you business, which nowadays has become a viable solution for small and medium sized companies in a wide range of industries, you’re probably set. This of course doesn’t mean that other types of business insurance may not be required.

Secondly, the type of work you do, and the nature of your business may dictate whether or not office renter’s insurance is right for you. For standard office setups for administrative functions and light foot traffic, damage to the space is not so much of a risk. However if you’re a doctor, dentist, chiropractor or an architect, perhaps office renter’s insurance should be something that you look into. Regardless of the use of the space, It’s key to ask yourself whether being unable to use your space for a certain period of time can cause your business to suffer.

For example, let’s say one of your employees leaves the coffee pot on overnight and a fire accidentally starts, causing your space to be inaccessible to you and your team for weeks (not to mention damage to your equipment). In this case how much business would you lose? Can your team work virtually from home for a few weeks without much loss of productivity? For a social media company, this may be the case, for a dentist, this could be a huge problem and business interruption insurance could be an answer.

For more traditional office space arrangements, the deal worked out with your landlord should also specify who is responsible for what types of damage. Some leases specify that the tenant is responsible for any damage to the interior of the space, while the landlord is responsible for any damage to the external structure and mechanics of the building. Making sure that all of these items are addressed before signing any lease is essential.

The size of your business also matters. The larger the commercial enterprise, the more people utilizing the space on a daily basis, which leads to higher office renters insurance premiums.

So let’s say that you do opt to buy a rental insurance policy. What does it cover? Well, that also depends on what you are trying to protect. There is insurance against physical damage to the space, theft of on-premise items, personal injury of an employee, and more. Some plans will cover each of these individual circumstances, and some will cover a combination or all of them.

Our opinion at Turnkey Office Space is that for most small startups requiring basic office setups with standard administrative needs, office renters insurance can be a secondary priority to be addressed after other expenses required in order to get the business on its feet are satisfied. However for professions requiring specialized equipment (Dentists, Doctors, Acupuncturists etc) that rely on their space to make money and with heavy customer foot traffic, office renters insurance seems to be more of a pressing need and will come in handy.

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