What insurance do you need for a mixed commercial and residential property?

When you have properties that are part commercial and part residential, you need a bespoke quote to make sure you’re properly insured against the main risks.

Not all insurance companies provide this kind of specialist cover for landlords who invest in up to five properties that include a mix of residential and commercial outlets – for example, a shop or office with residential flats above, or a café or pub that also provides separate residential accommodation.

The tricky part of insuring mixed-use properties is you will typically have different agreements and be responsible for different things for each tenant. For example, you may own the shop outright, but only own the lease for the flat above, for which you simply charge ground rent and service charges.

And if you were to have a property where you rented a doctors surgery and then owned one or two residential flats above, which you let to tenants, insuring would be quite complicated so you would need a bespoke quote. Although it’s relatively simple to insure the building itself and take out public liability insurance, you would be responsible for very different fixtures and fittings in the surgery from those in the flats.

In addition, insuring rent for landlords who have multiple revenue streams from monthly and quarterly rent, ground rent and service charges, and who work with lots of different tenant types, is complex. You need an insurer, like Direct Line, who knows and understands the risks involved and can provide tailored cover to protect your revenue streams and your assets accordingly.

And if you’re buying or own commercial property with mortgage finance, your lender will need to see evidence that you have good enough insurance to cover what is - until you’ve paid for it - essentially their asset.

For mixed use properties, you will need:

• Buildings insurance
• Public and Employers’ liability insurance
• Rental and other income protection
• Legal cost cover, for example, to evict non-paying tenants
• Cover for re-housing costs for business and residential tenants
• Malicious and accidental damage cover

There may also be bespoke fixtures and fittings that require additional insurance, such as glass and sanitary ware.

At Direct Line, we understand you have a lot of responsibility as a mixed-use property owner and landlord, so we also include in our policies helplines for business legal advice, health and medical assistance, business emergency assistance and glazing and security systems.

Contact our mixed-use commercial insurance experts to better understand how we can help make sure your properties are carefully protected.