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Lease Incentive Insurance

Lease Incentive Insurance – As Good as it Sounds

In a previous post we described how ‘bolting on’ a separate Rent Default policy can provide Property Owners with that extra security should a tenant fail to make their rental payments. This insurance product is great for bridging the gap in terms of lost rent, but what’s available to attract new tenants should a catastrophic event occur?

Lease Incentives can be built into an insurance policy to assist Property Owners in enticing existing and prospective tenants, to bring them into the building following a major loss (such as a fire).

Examples of incentives which are included in a policy are:

Re-leasing/re-launch costs and expenses, which include leasing fees payable to agents

Contributions towards new fit outs, any period of abatement, or rent free periods

Marketing costs including (but not limited to) advertising & educating prospective tenants through printed, televised or web media

Limits of insurance and amount of incentives available can be selected by the Property Owner, guided by the advice of KBI and the Insurer. The typical period for this cover is for 6 months immediately following complete reinstatement of the insured property.

Packaging Lease Incentives and Rent Default cover together as part of a Commercial Property Insurance Policy provides the Property Owner with comprehensive protection – even in these uncertain times.

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