COVERTRADE SERVICES

Commercial & Residential Let Insurance

Comprehensive protection for your mixed-use properties and multi-let buildings.

The Trade Downstairs Sets The Premium

A shop with flats above is rated on what happens in the shop. Fire does not respect the boundary between commercial and residential, so a takeaway with fryers, a restaurant kitchen or a late-night bar at street level raises the risk to everything above it, and insurers price the whole building accordingly.

Which is why a change of commercial tenant is a change to your insurance, not just to your rent roll. An office becoming a takeaway is a materially different building from an underwriter's point of view, even though nothing about the bricks has changed.

Mixed use is also its own product rather than a residential policy with a shop bolted on. The sections below cover why that matters, what fire separation insurers expect, and why one policy on the whole building beats two.

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Fire Separation Between The Two Uses

Compartmentation between the commercial and residential parts is what insurers focus on, because it decides whether a fire downstairs becomes a fire in the flats.

What they expect: fire-resisting construction to the floor between the uses, protected escape routes for the flats that do not pass through the commercial premises, and detection appropriate to the building. Older conversions are usually weakest here, particularly where the flats never got a properly separate entrance.

If a fire risk assessment has identified works, insurers will want to know what has been done and what is outstanding. Having that documented is worth real money at renewal, and it is worth having regardless of the insurance.

Two Kinds Of Tenant, Two Sets Of Rules

A mixed-use building makes you two kinds of landlord at once, governed by different rules, and it is easy to apply the habits of one to the other.

Upstairs you have residential tenants with deposit protection, gas and electrical safety duties, and rehousing obligations if the building becomes uninhabitable.

Downstairs you have a commercial tenant on a lease that probably makes them responsible for repairs, requires them to insure their own contents and liability, and recovers your buildings premium through insurance rent.

Ask for the commercial tenant's own insurance at the start of the lease and each renewal. Their public liability protects you as well as them, and knowing they hold it is part of managing the building rather than an administrative nicety.

Mixed Use Checklist

What decides a mixed-use premium.

Exactly what the commercial tenant does
Fire separation between the uses
Rebuild cost for the whole building
Loss of rent from both parts
Alternative accommodation for tenants
Any change of commercial tenant

Flexible payment options
Dedicated account managers
Out-of-hours contact should you need to make a claim or just have a question
A quick and easy, pain-free service
An excellent customer experience

Why A Standard Landlord Policy Will Not Fit

Residential landlord policies are rated for houses and flats. Commercial property owner policies are rated for shops, offices and units. A building that is both is neither, and trying to force it onto the wrong product is where mixed-use owners end up either paying too much or discovering an exclusion.

A mixed-use policy handles the whole building on one schedule, with the commercial and residential parts rated appropriately, one renewal date and one insurer at claim time, which matters when a fire in the shop damages the flats above and you do not want two insurers debating whose loss it is.

Loss Of Rent From Both Halves

A serious loss in a mixed-use building usually stops both income streams at once. A fire in the takeaway takes out the flats above through smoke and water even where the fire itself never reaches them, and the residential tenants have to be rehoused while the commercial tenant is not trading.

So the loss of rent figure needs to reflect the whole building’s income, and the indemnity period needs to reflect how long a full reinstatement would realistically take: consents, tender, rebuild, refit, and re-letting both parts. Twelve months is frequently too short. Check too whether alternative accommodation for residential tenants is included, because rehousing a family for months is a real cost.

When The Shop Below Changes Hands

A change of commercial tenant is a material change to your insurance, not just to your rent roll. An office becoming a takeaway, a shop becoming a restaurant, or a quiet unit becoming a late-night bar changes the fire risk to the whole building and the exposure to the flats above.

Tell us when a lease changes hands or a tenant changes what they do. It is also worth enforcing the permitted use clause rather than letting it drift, and asking to see the commercial tenant’s own insurance. Their liability cover protects you as well as them. Premiums can be paid monthly or annually.

What We Need To Quote

The address, age and construction, exactly what the commercial tenant does, how many flats there are above and whether they are let or owner-occupied, the rebuild cost for the whole building, the annual rent from each part, what fire separation exists between the uses, whether any part is empty, and the claims history for the last five years.

Protect Your Properties

So why wait? Protect your combined commercial and residential properties today with CoverTrade's comprehensive insurance coverage. Contact us now to schedule a consultation with one of our expert advisors.

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Cover that often goes with this

The gaps we most often find sitting next to this policy.

Commercial let insuranceIf the residential part goes and it becomes a purely commercial building.
Landlord insuranceFor the residential properties in the rest of a portfolio.
Block of flats insuranceWhere the residential part is several self-contained flats.

Common questions

What is mixed use property insurance?+

Cover for a building containing both commercial and residential parts, most commonly a shop, takeaway or office at ground level with flats above. It is a distinct product because residential landlord policies are rated for houses and flats while commercial property owner policies are rated for units, and a building that is both fits neither. A mixed-use policy puts the whole building on one schedule with each part rated appropriately.

Why does what the shop does affect the flats' insurance?+

Because fire does not respect the boundary between them. A takeaway with fryers, a restaurant kitchen or a late-night bar downstairs raises the risk to everything above it, and insurers rate the whole building accordingly. That is why a change of commercial tenant is a material change to your insurance and not just to your rent roll. An office becoming a takeaway can change the premium substantially.

Do I need one policy or two?+

One, in almost every case. Two policies on one building creates an argument at exactly the wrong moment: when a fire in the shop damages the flats above through smoke and water, two insurers will spend months deciding whose loss it is while you are not being paid. One insurer on one schedule settles the whole claim.

How should I set loss of rent on a mixed use building?+

Against the whole building's income, because a serious loss usually stops both streams at once, and with an indemnity period that reflects a full reinstatement: consents, tender, rebuild, refit and re-letting both parts. Twelve months is frequently too short for a mixed-use building. Check whether alternative accommodation for residential tenants is included as well; rehousing a family for months is a real and often overlooked cost.

What fire separation do insurers expect?+

Adequate compartmentation between the commercial and residential parts: fire-resisting construction to the floor between them, protected escape routes for the flats that do not pass through the commercial premises, and appropriate detection. Older conversions are often weakest here, particularly where a separate entrance to the flats was never properly provided. If a fire risk assessment has identified works, insurers will want to know what has been done.

Does my commercial tenant need their own insurance?+

Yes, and you should see it. Their liability cover and their contents and stock cover are theirs to arrange, and their public liability protects you as well as them if something they do injures someone. Ask for a copy at the start of the lease and at each renewal, and enforce the permitted use clause. A tenant quietly changing what they do is one of the most common ways a mixed-use building ends up mis-rated.