A new shopfront, internal fit-out, roof replacement or building conversion can change the risk associated with a commercial property before the work is even completed.

The insurance arranged for an occupied office, shop, warehouse or let commercial unit may not necessarily operate in the same way once contractors arrive, structural work begins or parts of the building become temporarily vacant.

The important consideration is not simply whether the work seems minor or substantial to the property owner. An insurer may consider the nature and value of the work, how long it will take, whether the property remains occupied and what additional risks are introduced while the project is underway.

For this reason, commercial landlords should discuss significant alterations with their broker or insurer before work begins and establish whether their existing insurance remains suitable.

Why can alterations affect commercial property insurance?

Commercial property insurance is arranged using information about the building and how it is used.

This can include its construction, occupancy, security, reinstatement value and the activities taking place at the premises.

Building works can change several of these factors at the same time.

For example, contractors may:

• •use heat-producing equipment or carry out hot works;
• •remove or alter walls, doors or fire protection;
• •undertake roofing work that temporarily exposes part of the building;
• •install additional electrical equipment;
• •store tools and building materials on site;
• •alter security arrangements; or
• •leave sections of the property temporarily unused.

The property itself may therefore present a different risk during the works from the one originally described when the insurance was arranged.

This does not mean that every minor repair or decorating job will require changes to the policy. The significance of the work and the insurer’s requirements will vary.

The safest approach is to tell your broker or insurer about significant proposed alterations and allow them to determine whether the existing policy needs to be reviewed.

What insurance might be needed during commercial property alterations?

The insurance arrangements required during a refurbishment, conversion, extension or structural alteration will depend on the project.

In some circumstances, an insurer may be prepared to continue the existing commercial buildings insurance subject to additional information or amended terms.

Larger projects may require separate arrangements for the work being carried out.

Contract works insurance may provide cover for physical loss or damage to works while they are in progress. Depending on the policy, this can include materials, permanent works and items awaiting installation.

It should not be assumed that contract works are automatically covered by an existing commercial property policy.

There can also be an important distinction between insurance for the existing building and insurance for the new works.

For example, if contractors are carrying out a major conversion and a fire damages both the existing structure and the work in progress, it should be clear which insurance arrangements are intended to respond to each part of the loss.

This is one of the reasons the insurance position should be established before significant building work begins.

What information should you give your broker or insurer?

Contact your broker or insurer as early as reasonably possible when significant work is planned.

They may need information about the project to determine whether the existing policy can continue, whether additional conditions or endorsements are required, or whether separate insurance should be considered.

Useful information may include:

• •the property address and its current use;
• •whether the building will remain occupied during the work;
• •which parts of the property will become vacant;
• •a description of the proposed alterations;
• •whether structural work is involved;
• •whether roofing work or excavation is planned;
• •whether hot works such as welding or cutting will take place;
• •any changes to fire protection or security;
• •the estimated contract value;
• •the proposed start and completion dates;
• •details of the main contractor;
• •relevant contractor insurance information; and
• •plans, drawings or schedules of work where available.

The exact information required will depend on the property, project and insurer.

If the scope, value or duration of the project subsequently changes significantly, discuss the revised position with your broker.

Does the contractor’s insurance protect the landlord?

Do not automatically assume that a contractor’s insurance replaces the landlord’s own property insurance.

A contractor will normally arrange insurance appropriate to its own business and contractual responsibilities. This may include public liability and, where appropriate, other construction-related covers.

However, the contractor’s policy and the landlord’s commercial property insurance serve different purposes.

For example, a contractor’s liability insurance may respond where the contractor becomes legally liable for injury or damage arising from its work. That does not necessarily mean it insures the landlord’s entire building against every type of loss occurring during the project.

Before significant work begins, landlords should establish what insurance the contractor holds and discuss with their own broker how this interacts with the insurance on the property.

The building contract may also specify which party is responsible for arranging particular insurance.

What happens if part of the property becomes unoccupied?

Building works can sometimes leave part or all of a commercial property temporarily empty.

This is particularly relevant where a landlord is refurbishing premises between tenants.

Commercial property policies can contain specific conditions relating to unoccupied premises. These may concern matters such as inspections, utilities, security or the extent of cover available while the building is vacant.

A short period between tenants should therefore not automatically be treated in the same way as normal occupation.

The situation can become more significant where contractors are stripping out the premises, services have been disconnected or structural work is taking place.

If a property or individual unit will become vacant during alterations, tell your broker and establish how the existing policy treats the period of unoccupancy.

For more information about vacant business premises, see our guide to unoccupied commercial property insurance.

What if tenants remain in the property during the work?

Some alterations take place while tenants continue to occupy the building.

This may happen in multi-let properties, office buildings, retail premises or developments where work is completed in stages.

Where this happens, the landlord may need to provide information about how the work will be separated from occupied areas and whether access, security or fire-safety arrangements will change.

For example, a project may affect:

• •entrances and exits;
• •fire doors and escape routes;
• •alarm or sprinkler systems;
• •access to individual units;
• •electricity, water or heating;
• •security systems; or
• •areas shared by several tenants.

A phased refurbishment of an occupied building can therefore present different considerations from work carried out with full vacant possession.

Property alterations can affect the rebuild value

Significant improvements to a building can also change how much it would cost to reinstate.

An extension, major conversion, new mezzanine floor or substantial structural alteration may increase the amount required to rebuild the property following a serious insured loss.

This is different from the property’s market value.

The buildings sum insured should normally reflect the cost of reinstating the property rather than its market or sale value. Our guide to calculating a commercial property rebuild value explains how this figure is worked out.

Where significant alterations increase the size, specification or complexity of a building, discuss whether the declared buildings value should also be reviewed.

This helps reduce the risk of the completed property being insured using information that no longer accurately reflects the building.

What about loss of rent?

Commercial landlords should also consider how major works interact with their rental income.

Loss of rent insurance is generally intended to respond where rental income is lost following insured damage covered by the policy, subject to the particular terms, limits and indemnity period.

It should not be assumed that it covers rental income lost simply because planned building works overrun or a refurbishment takes longer than expected.

If a significant alteration affects existing tenants, creates a prolonged vacant period or changes the expected rental value of the property, discuss the position with your broker.

Tenant alterations need attention too

Not all alterations are commissioned directly by the landlord.

Commercial tenants frequently modify premises to suit their businesses.

This might include installing:

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

Even where a lease permits the tenant to carry out alterations, that does not automatically determine how the landlord’s insurer will view them.

A landlord should understand what significant work is proposed and establish whether the changes need to be disclosed to the broker or insurer.

This is particularly relevant where the alterations change the use, construction, security, fire protection or reinstatement value of the property.

What should you check before work starts?

Before significant alterations begin, you should have a clear understanding of how the property will be insured while work is taking place.

Questions to discuss with your broker may include:

• •Will the existing buildings policy continue during the work?
• •Does the insurer need to approve the alterations beforehand?
• •Are additional policy conditions being introduced?
• •Is the existing building insured throughout the project?
• •Who is responsible for insuring the work in progress?
• •Is separate contract works cover required?
• •Does temporary vacancy affect the existing cover?
• •Do security or inspection requirements change?
• •Does the declared rebuild value need reviewing?
• •Does the insurer require details of the contractor?

The answers will depend on the policy and the nature of the project.

The objective is not to decide for yourself which insurance arrangement is appropriate. It is to give your broker accurate information so that the relevant insurer can assess the changed circumstances.

Keep records of alterations and insurance changes

Keep a record of significant alterations made to commercial properties.

Useful documents can include:

• •specifications and schedules of work;
• •contractor details;
• •project values;
• •plans and drawings;
• •correspondence with your broker;
• •confirmation of any changes to the insurance;
• •contractor insurance documents;
• •completion information; and
• •updated reinstatement valuations where appropriate.

For landlords with several commercial properties, maintaining these records can make future insurance renewals considerably easier.

It also reduces the chance of the insurance information continuing to describe a property as it existed several years ago rather than as it stands today.

Review your commercial property insurance when the building changes

Commercial property insurance should reflect the property that actually exists and the way it is being used.

A significant refurbishment, extension, conversion or structural alteration can temporarily change the risk while contractors are on site and permanently change the building once the project is complete.

Commercial landlords should therefore involve their broker or insurer before significant work starts rather than waiting until the next annual renewal.

Provide accurate details of the proposed work, establish how the existing building and work in progress will be insured, and update the information again if the project changes significantly.

Once the alterations are complete, consider whether the property’s construction, occupancy, security and reinstatement value still match the information held by your insurer.

For broader information about insuring let business premises, see our commercial property insurance for landlords guide. You can also visit our main commercial property insurance page for information about protecting commercial buildings and comparing cover.

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Last updated: September 2026