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Business insurance and rental building insurance

Important: a fair and complete assessment of your rental building should be entrusted to a professional to ensure adequate protection in the event of a claim.
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affordable rental building insurance

Insurance for your property

Your building, your office contents, your computer equipment, your tools and equipment, as well as your merchandise must be covered at their fair value. Different types of coverage adapted to your specific needs, as well as certain additional guarantees can make a real difference when included in your policy.

Insurance for your liability

It is essential that your business be adequately protected against physical or bodily damage that could be caused to others. For example, whether a product manufactured or sold, an act or service rendered is the cause of damage, or one of your employees is involved, the survival of your business depends on complete and appropriate coverage.

Loss of profits and rental income insurance

In the event of a claim, certain expenses must be paid even though you cannot benefit from all of your income. For many, these unforeseen delays could be fatal or cause significant damage. Specialized brokers will analyze your financial statements with you and inform you of the necessary coverage to fill any gaps.

Equipment breakdown insurance

Certain damage caused to and by equipment, such as air conditioning units or hot water tanks, is not covered by your basic insurance. Once a complete inventory of all relevant items has been completed, AccesDirect advisory brokers will inform you of the best available coverage to protect against these risks. rental building insurance quote

Well-insured building

Insuring a rental residential building is an important responsibility for any property owner. It is therefore essential to understand how to properly insure your rental building. For this, you can call on a property damage insurance broker to help you find the right coverage for your property. In this article, we will discuss how you can insure your rental building using the services of a property damage insurance broker in Quebec.

Different insurance coverages for a rental residential building

The first step in insuring your rental residential building is to understand the different insurance coverages available. There are several types of insurance coverage you can purchase to protect your building, including:

  • Building insurance

Building insurance is a basic coverage that protects your building against physical damage caused by events such as fires, storms, floods, etc. This insurance generally covers walls, floors, roofs and any other structural element of the building.

  • Liability insurance

Liability insurance is coverage that protects the owner against lawsuits filed by third parties due to injuries or damage suffered on the property. This coverage may also cover legal fees if the owner is sued.

  • Loss of rental income insurance

Loss of rental income insurance is coverage that protects you against the loss of rents and rental income in the event of business interruption caused by physical damage to the building.

Why hire a property damage insurance broker to insure your rental building?

It can be difficult to understand all insurance coverage options and determine the best option for your rental building. This is where the expertise of a property damage insurance broker can be extremely helpful. A property damage insurance broker can help you find the best insurance offers for your rental building by researching and comparing the different options available. The broker can also advise you on the different insurance coverages you may need to protect your property. The property damage insurance broker is also responsible for the entire underwriting process, claims management and customer service. In the event of a claim, the property damage insurance broker can help coordinate repairs, quotes and process claims with the insurance company. Compare our residential building insurance program

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Frequently asked questions about rental building insurance

Does Quebec’s Civil Code require a rental building owner to have insurance?

The CCQ does not mandate insurance for owners, but article 1854 CCQ requires the owner to maintain the housing in good condition. In the event of an uncovered loss, the owner remains personally responsible for repairs and losses suffered by tenants. Virtually all financial institutions require a valid policy as a mortgage condition. Without insurance, a claim for damages can reach several hundred thousand dollars.

What is the difference between replacement cost and actual cash value in a rental building policy in Quebec?

Replacement cost covers the full cost of rebuilding at current market prices, with no deduction for depreciation. Actual cash value can reimburse 30 to 50% less on an aging building. Since 2020, construction costs in Quebec have jumped by more than 40% — an appraisal from 5 years ago can therefore leave a significant shortfall. An AMF-certified broker can order an updated reconstruction appraisal to avoid underinsurance.

Is loss of rental income automatically covered when a claim makes an apartment uninhabitable?

No, loss of rental income coverage must be expressly included in your policy. It generally compensates 12 to 24 months of rent during repairs. Without this guarantee, a fire forcing evacuation of 6 units can represent $60,000 or more in annual loss entirely at your expense. Also check whether your policy includes temporary accommodation costs imposed by the Régie du logement.

If a tenant causes a fire, does the owner become liable to other tenants?

Under article 1467 CCQ, the owner can be held liable if a maintenance defect contributed to the spread of the loss. Other tenants can turn against the owner if their property was damaged by construction defect. The liability coverage in your policy covers legal fees and compensation, with limits usually $2M to $5M in Quebec.

My rental building needs electrical upgrades to be insured — is this common in Quebec?

Yes, it is frequent. Quebec insurers often refuse or exclude electrical fire coverage on buildings with fuse panels or aluminum wiring (common in buildings from 1965-1975). The Building Act (LRQ, c. B-1.1) requires all installations to comply with Quebec’s Building Code. Upgrades certified by a master electrician can make the building insurable and reduce the premium by 15 to 25%.

What coverage is recommended for a rental building with a flood-prone basement in Quebec?

Sewer backups and lateral seepage are the leading cause of home insurance claims in Quebec, with average damages of $15,000 to $45,000 per event. A basic policy generally excludes these risks — you must add the « groundwater » endorsement explicitly. Since the floods of 2017 and 2019 in the greater Montreal area, some insurers impose a waiting period of 5 to 14 days on purchase of this coverage.

Does the owner’s insurance cover the personal belongings of tenants?

No. The owner’s policy protects the building, liability, and rental income, but never the personal effects of tenants. Under article 1854 CCQ, the owner must inform tenants of this limitation. Each tenant must purchase their own home insurance. Some owners contractually require proof of tenant insurance to avoid disputes during a claim.

How does the insurance premium tax (9%) apply to rental building insurance in Quebec?

In Quebec, all property insurance premiums are subject to a 9% provincial tax collected by Revenu Quebec. This tax applies to the gross premium amount, including endorsements, and is deductible as a business expense if the building generates taxable rental income. A 6-unit building with an annual premium of $4,500 represents approximately $405 in additional tax to budget for.

How many units must you own to need commercial rental building insurance?

In Quebec, most insurers classify a building as commercial once it has 7 or more units. Below 7 units, some residential insurers can still cover the building under a landlord home insurance policy. However, as soon as the building includes a commercial space on the ground floor (convenience store, restaurant, office), it automatically switches to commercial insurance, regardless of the number of units. A specialized broker can compare options for you.

Does rental building insurance cover damage caused by a negligent tenant?

The owner’s policy covers physical damage to the building caused by a tenant, but the insurer may exercise a subrogation claim against the negligent tenant (art. 1474 CCQ). If a tenant causes a fire through gross negligence, your insurer indemnifies you and then turns against the tenant. This is why it is strongly recommended to require your tenants to purchase their own tenant insurance — this protects everyone and avoids disputes.

What is the difference between reconstruction value and market value when insuring a rental building?

Reconstruction value is the cost to rebuild the building from scratch to current Quebec Building Code standards, including labor and materials. Market value includes the land and reflects the real estate market. Insurers require the reconstruction value, which may be higher or lower than market value. Undervaluation triggers the proportional clause, reducing the indemnity paid for a partial loss.