If you lease a building or office for your business and make improvements to the space—such as remodeling the interior—it’s a good idea to review your business insurance coverage.
Generally, if you’ve made any after-the-fact alterations, it’s up to you, not the property owner or landlord, to insure them.
For example, let’s say you’ve leased space for your beauty salon, retail business or medical office and you install new sinks, counters and shelving. You would need to insure those items.
In the insurance industry, we call these changes improvements and betterments. Essentially, it means that you’re responsible in a leased space for insuring any alterations you have made, such as flooring, light fixtures, wall coverings, wiring, plumbing, cabinets, shelving or anything else that is attached to the ceiling, walls or floors.
Because these improvements might be essential to your business operations, it’s important to understand who is responsible for replacing them if they become damaged. If you do not update your business insurance to cover these improvements, you could be underinsured and without the means to fully repair or replace the improvements, if a covered loss occurs.