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Quote Ref: UKIN01

Mixed commercial and residential building insurance explained

Corner of a pub
25 January 2018

By UKinsuranceNET In Landlord Advice

Members of Parliament and the Federation of Master Builders (FMB) share the view that flats above high street shops offer a huge potential in helping to solve the nation’s current housing shortage, according to a report in UK Construction Online on the 17th of December 2017.

The solution presents a clear opportunity for property investors to benefit from returns on both commercial lettings of the business premises and the residential accommodation above.

Mixed commercial and residential building insurance provides the means for ensuring that both parts of the property are adequately protected by the relevant type of cover.

Commercial building insurance

With any type of property insurance, it is important that you arrange insurance relevant to the use of the building. In the case of commercial property, this presents a wide range of possibilities, simply because of the many different kinds of commercial property in use – as we highlighted in a number of FAQs on the subject.

The cover also needs to reflect whether the commercial property is occupied by yourself – as a place from which to run your own business – or one that is let to others.

These are critical differences which are reflected in the precise kind of commercial property insurance you arrange and which is designed to safeguard not only the building and its contents but also your liabilities as a business owner and the potential for business interruption caused by a range of insured events.

Residential building insurance

Similarly, you might choose to occupy the residential part of a mixed-use property or let the accommodation to tenants.

In either event, the insurance needs to reflect its use as living accommodation, rather than commercial use. As the landlord of any tenants who live there, you also have extensive responsibilities and obligations for their health and safety and assume liability for your actions that result in any of them suffering an injury or having their possessions damaged.

Mixed commercial and residential building insurance 

Insurance for mixed-use premises such as these, therefore, needs to reflect the twin – but very different – demands and requirements of both commercial property insurance and residential building insurance.

It is for that combination of benefits that, here at UKinsuranceNET, we have developed specialist building insurance for shop and flats. It is designed to meet your needs for cover that extends to both the commercial and the residential elements of your investment. Those needs may vary significantly, depending on whether you are planning to let the shop or other outlet to tenants or use it for your own business; and whether you move into the residential accommodation as the owner occupier or instead let it to tenants.

It is crucial to arrange the appropriate type of property insurance according to its use and occupation. To ensure that you have the relevant cover, you might arrange separate insurance policies to safeguard the commercial part of the premises on the one hand and the residential part on the other.

Insurance for mixed-use property combines your two requirements into a neater, more convenient and simple, single insurance policy to safeguard the entire premises – with premiums that are likely to be more cost-effective and competitively priced.

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