Landlords worried about commercial tenants becoming insolvent can now insure against loss of rental income.
The new policy, underwritten by quoted insurance company Credit & Guarantee, gives property owners the chance to cover losses of up to £15m.
Credit & Guarantee states that the policy covers 100% of rental stream, with no deductible. It is designed as a deal-making instrument, encouraging certainty in investments, sale and leasebacks and new leases.
Malcolm Jameson, of Credit & Guarantee, said that claims are triggered if a liquidator is appointed during the five-year policy term. The policy is deal-specific, with premiums and levels of cover tailored to particular circumstances.
Bob Fitzpatrick, of specialist property insurance broker Cadogan, said: “I think this is the only product of its type on the market at the moment. It would be worth looking at. The quoted premium of around £1,000 for £25,000 of cover does seem quite expensive, but it’s covering quite a risk. Given that it’s backed by Allianz, one of the largest insurers in Europe, it’s a fairly good covenant.”
PLS News 12/5/99
