What Insurance Toronto Commercial Landlords Need

What Insurance Toronto Commercial Landlords Need

November 16, 2023 / 5 mins read

If you rent property like offices and retail space or apartments and condos, you face many risks as a Toronto commercial landlord and the right insurance package will protect you.

You need a Toronto commercial landlord insurance package to keep your property safe from financial losses for any events, accidents, or occurrences that can happen at your rental properties.

As a landlord, do you rent out office or retail space on Bay, Yonge, or Front streets, or on Richmond, Queen, Dundas, or College/Carlton?

Or do you rent out condos on King Street West, Queen Street West, York Street, Yorkville Avenue, Bloor Street, or Church Street?

Are you a commercial property landlord in Oshawa, Whitby, Scarborough, Etobicoke, Mississauga, Oakville, Vaughan, Markham, or Richmond Hill?

Wherever you are a commercial property landlord in Toronto, Greater Toronto Area (GTA) or anywhere in Ontario, your Western business insurance expert will give you top-notch insurance advice and ways to save.

How will Toronto landlord insurance protect my investment?

You need to protect your commercial real estate investment from any potential risks it may face on a daily basis, such as fire, vandalism, and replacement and/or repair of equipment.

Without the right insurance package or enough insurance, you are financially at risk. Even though this type of insurance isn’t mandatory for rental properties, it’s strongly recommended that you have it to protect you and your investment from unexpected damages or third-party lawsuits.

Can you afford not to protect your commercial property?

Did you know that Toronto landlord insurance can also cover you as the owner of townhouses, apartments, rooming houses, duplexes, and triplexes?

A Toronto commercial landlord insurance package can help protect you from these 3 common claims:

  1. A tenant slips and falls on ice on the sidewalk entrance to your apartment building and breaks her wrist and sues you as the landlord. Commercial General Liability (CGL) Insurance can help pay for your injured tenant’s medical expenses, the cost to defend yourself in court, and any financial settlement you are ordered to pay to the tenant by the court.
  2. There’s a heavy rainstorm and the city’s sewer system backs up and floods your condo building’s basement. If you have added optional sewer backup coverage to your landlord insurance package, it can help with the cleanup.

3. There’s a fire at a Toronto commercial property you own and it causes significant damage. Commercial property insurance provides coverage for physical loss or damage to your property and its contents caused by fire.

As a Toronto commercial landlord, here’s an insurance check list:

  • Do you have the best Toronto business insurance rate that suits the purpose of the buildings that you own?
  • Do you have the right amount for your deductible and regularly review it to make sure it’s the right amount for you as a commercial property landlord?
  • Is your number of employees up to date?
  • Do you know the value of your buildings and are they sufficiently insured?
  • Are you or your employees using personal vehicles in their work for you?

What’s in a Toronto landlord’s insurance package?

Commercial General Liability (CGL) insurance

This type of insurance protects your commercial real estate investments against common claims like third-party property damage (damage to a customer’s property) or bodily injuries if a client slips, falls, and is injured at one of your properties. CGL can help cover a client’s medical expenses and your legal fees regardless of the outcome of a lawsuit you face.

Without this type of insurance, you would be paying for these expenses out of your own pocket.

Ask your Western business insurance expert how much CGL insurance you will need, depending on how many commercial properties you own and their purposes.

Commercial property insurance

Commercial property insurance provides coverage for loss or damage to your property and its contents due to fire, flood, theft, or vandalism.

It can typically cover:

  • Furniture, equipment, supplies
  • Inventory and computers
  • Documents such as payroll, accounts receivable

Business interruption insurance

Business interruption insurance supports you when a building that you own cannot operate as usual due to a covered loss.

There are many losses that can force one of your buildings to shut down. Some examples include:

  • Damage to your building from fire or vandalism
  • Damage to a neighboring business
  • A disruption in your supply chain

This type of insurance can help with expenses such as:

  • Payroll
  • Rent
  • Utilities
  • Property taxes
  • Alarm monitoring
  • Relocation of your business

Cyber liability insurance

As a Toronto commercial landlord, you likely electronically store information about your tenants. You use email and may have a website, too. All of this makes you a target for cybercriminals.

If your computer system is hacked, cybercriminals can sell the information or hold it for ransom.

Without cyber insurance, you will have to pay out of your pocket for the cost of restoring your system. You may also be liable for damages to third parties whose information has been stolen and you may have to pay for notification expenses to inform parents affected by a breach.

Commercial vehicle insurance: If you have a business car, truck, or van that you use as part of your work as a Toronto commercial property landlord, it needs commercial coverage. Your personal car insurance usually won’t cover using your own vehicles for business purposes.

Legal expense insurance

What if you have tenants who won’t pay their rent? This type of insurance typical pays for legal advice or legal fees associated with a lawsuit. It can also help cover court fees, and expert witness fees.

Equipment insurance

Equipment breakdown insurance helps cover the costs of repairing or replacing essential equipment, such as a building’s boiler or HVAC system if they are if they are broken or damaged due to a mechanical or electrical issue.

Sewer backup insurance

Sewer backup insurance is additional insurance that you can buy to protect your Toronto rental properties should a municipal sewer system flood your building. It typically covers the costs to clean it up.

Overland water insurance

This type of insurance typically covers your expenses if a flood caused by extreme weather, a spring thaw, or an overflowing body of freshwater results in damage to your property and enters through the basement, windows, doors, and roofs.

Earthquake insurance

This type of insurance can help cover losses and damages to your property and contents caused by earthquakes. If you are in an area that is prone to earthquakes, this type of insurance is recommended to protect your property.

What if a tenant intentionally damages your property?

Your Toronto landlord insurance may cover accidental damage caused by your tenants, such as an unintentional kitchen fire. It does not cover intentional damage or wear and tear.

Are my tenants required to have renter’s insurance?

Your tenants are not legally required to have renter’s insurance. It is recommended, though, that you encourage your tenants to purchase their own tenant insurance policies to cover their belongings.

Your Toronto landlord insurance policy will not cover any losses of or damages to your tenants’ furniture and clothing, for example.

How much insurance do I need as a commercial landlord?

It will depend on how many, type of buildings you own, and their purposes.

Ask your Western business insurance expert to determine the right level of coverage for you as a commercial landlord.

What do I do if I have a claim as a Toronto commercial landlord?

  • Contact your broker immediately after any business-related mishap. Waiting to file a claim can confuse insurers about the severity of the damages to your business.
  • Know your policy so that when you contact your broker you are familiar with what will be covered or not.
  • Document the damage. Take photos right away and write down what happened.
  • Do not throw away damaged goods after taking photos. Keep the physical evidence so that your adjustor can see it.
  • Do not invite lawsuits. Don’t say anything that could be used against you, especially if you aren’t sure what happened.
  • Be honest about what your damaged property is worth. Damaged commercial property is generally valued according to its actual cash value or replacement value.

Western Insurance has licensed BUSINESS INSURANCE EXPERTS to get you the right Toronto commercial landlord insurance package. Our experts are available now to help you navigate the business insurance journey to protect your investment.

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