An office, restaurant, workshop and warehouse can create very different risks inside the same premises. This is why commercial property insurers may need an accurate description of what each tenant actually does, rather than simply knowing that the building is occupied. For commercial landlords, keeping this information up to date can be particularly important when tenants change, businesses alter their activities or part of a property becomes vacant.

Why does a tenant’s business matter to an insurer?

Commercial property insurance is not assessed solely on the bricks and mortar. The construction, age, location, rebuild value and condition of the building can all be relevant, but insurers may also consider how the premises are occupied and what activities take place inside them.

Consider the same commercial unit occupied by different businesses. An accountancy firm may predominantly use desks, computers and office equipment. A restaurant could introduce cooking equipment, heat, extraction systems and increased public access. A light engineering business could use machinery, undertake manufacturing processes or store materials connected with its work. A warehouse operator could store large quantities of goods, with the nature and value of those goods varying considerably between businesses.

The property has not necessarily changed, but what happens inside it has. That is why descriptions such as “commercial unit”, “shop” or “warehouse” may not provide enough information on their own.

Give an accurate description of the tenant’s trade

When asked what a commercial tenant does, use a description that reflects the business actually operating from the premises. For example, describing a tenant simply as “retail” may provide only part of the picture. A clothing shop, convenience store, electrical retailer and business selling vehicle parts are all retail operations, but their stock, equipment, opening hours and activities can differ. Likewise, describing premises simply as a “warehouse” does not explain what is being stored or whether other activities take place there.

Where relevant, information may include:

• •the tenant’s principal business activity;
• •what the premises are used for;
• •whether goods are manufactured or processed;
• •whether cooking takes place;
• •machinery or specialist equipment used;
• •the type of goods or materials stored;
• •whether members of the public visit the premises;
• •normal opening or operating hours; and
• •any other significant activities carried out at the property.

You do not need to decide yourself which details will affect an insurer’s decision. The safer approach is to give the broker an accurate description and allow the insurer to determine what information is relevant.

What happens if your commercial tenant changes?

A change of tenant is a sensible point to review the information held about a commercial property. Suppose an office tenant leaves and the next tenant intends to operate a café. The landlord still owns the same building, but its use and activities may have changed substantially. The reverse can also happen. A workshop could become an office, or a shop could become premises for another type of business.

Do not assume the existing insurance remains appropriate simply because the landlord, building and address have not changed. Tell your broker or insurer about the proposed change and provide an accurate description of the incoming tenant’s activities. They can then advise whether the change needs to be referred to the insurer and whether any policy terms need to be reviewed.

What should you find out about a new tenant?

Insurance may not be the first consideration when agreeing a new commercial tenancy, but obtaining clear information about the incoming business can make later conversations with your broker easier. Ask what the tenant will actually do at the premises rather than relying solely on a company name or broad business category.

For example, it may be useful to establish whether they intend to:

• •cook or prepare food;
• •install extraction equipment;
• •manufacture or process goods;
• •use heat-producing equipment;
• •operate machinery;
• •store significant quantities of stock;
• •store unusual or potentially hazardous materials;
• •make structural or substantial internal alterations;
• •operate outside normal business hours; or
• •allow significant numbers of customers or visitors onto the premises.

The information required will vary between properties and insurers. These are examples rather than a universal underwriting checklist.

Changes during a tenancy can matter too

The tenant does not necessarily need to change for the activities inside the building to change. A business can expand or diversify during a lease. For example, a tenant that originally used premises primarily for storage might later introduce manufacturing or repair work. A retailer might begin preparing food. A business might install new machinery or make alterations to accommodate different operations.

Where you become aware of a significant change in how the premises are being used, discuss it with your broker rather than waiting automatically for the next renewal. Whether a particular change affects the policy will depend on the circumstances and policy terms.

Multi-let properties need clear occupancy information

Accurate tenant information can become even more important where a commercial building contains several separately occupied units. One property might contain a café on the ground floor, offices above and another commercial business in a separate unit. Giving the broker only the activity of the largest tenant may not provide a complete description of the property.

Keep an up-to-date tenancy schedule showing which businesses occupy which units and what each tenant does. When a unit changes hands, update the information rather than simply replacing the tenant’s name. This helps establish the actual mixture of activities taking place throughout the building.

What about mixed commercial and residential property?

Some properties combine commercial and residential use, such as a shop or restaurant at ground level with flats above. Again, the activities within the commercial part of the building can matter. For example, the considerations associated with residential accommodation above an office may differ from those associated with accommodation above premises where cooking or other higher-risk activities take place.

Tell your broker about both the commercial and residential occupancy rather than describing the property solely by its dominant use.

What if a tenant leaves and the property becomes empty?

A tenant leaving can create a second issue: the property may become unoccupied while you look for a replacement. Do not assume that existing arrangements continue unchanged indefinitely while the premises are empty. Policies can contain conditions or restrictions concerning unoccupied premises, and requirements vary between insurers.

If a property or individual unit becomes vacant, tell your broker when the tenant left and explain the current situation. You can read our guide to unoccupied commercial property insurance for more information about commercial premises during periods of vacancy.

Tenant alterations can change the property risk

Commercial tenants sometimes modify premises to suit their operations. Changes could include:

• •commercial kitchens;
• •extraction systems;
• •machinery;
• •mezzanine floors;
• •additional electrical equipment;
• •partitions;
• •security shutters;
• •specialist storage; or
• •other fixtures and equipment.

Some changes may be relatively minor, while others could affect the building or how it is used. Landlords should understand what alterations are proposed and check the insurance position where appropriate before significant work begins. This is separate from deciding whether alterations are permitted under the lease or require planning, building-control or other approval.

Keep tenant information current throughout the policy

Tenant information should not be something you collect only when first arranging insurance. A simple property record can help landlords keep track of:

• •each occupied unit;
• •tenant names;
• •actual business activities;
• •tenancy start and end dates;
• •vacant units;
• •significant changes of use; and
• •major alterations you are aware of.

For landlords with several properties, keeping this information current can make renewal easier because you are not trying to reconstruct changes across an entire portfolio at the last minute. It can also help identify differences between the information held by the landlord and the information previously provided to a broker.

What should you tell your broker when a tenant changes?

When a commercial tenant changes, provide factual information rather than trying to determine whether the new tenant represents a “better” or “worse” insurance risk yourself. Tell the broker:

• •which property or unit is affected;
• •when the previous tenant left;
• •whether there was a period of vacancy;
• •when the new tenant moved in or intends to move in;
• •the new tenant’s actual trade;
• •what activities will take place at the premises;
• •whether cooking, manufacturing or machinery is involved;
• •what is being stored, where relevant; and
• •whether alterations have been or will be made.

Your broker or insurer can then determine what additional information is required.

Review the insurance position when occupancy changes

For a commercial landlord, a change of tenant is more than an administrative change to a tenancy schedule. It can alter what takes place inside the property, how the premises are used and the information an insurer needs to assess the building. The key is accuracy. Describe the tenant’s actual activities, tell your broker about significant changes and avoid assuming that an existing description remains suitable simply because the property itself has not changed.

If you own commercial premises that you let to businesses, you can find more information about commercial property insurance for landlords, including the types of property and landlord risks that specialist brokers may consider. For broader information about protecting business premises, see our main commercial property insurance page.

Frequently asked questions

Related products

Last updated: September 2026