Understanding Betterments & Improvements Coverage

Betterment insurance is supplemental coverage for additions or modifications made by a lessee to a space they lease. You may not discover this coverage is not automatically included in your Commercial Package or Business Owners policy until it is too late. Betterment insurance protects the tenant from losses or claims that would occur if they were unable to use or benefit from improvements they make to a leased structure.

If a landlord does not have a betterment clause in their policy, the property insurer may not recognize the added value owed to the improvements made by tenants. Most businesses, especially design professionals, that lease space or a building may wish to make changes to fit their business concept and employee needs. In some cases, these modifications are temporary and can be easily removed or replaced if the business should lose access to the rented space or it becomes damaged. Betterment insurance protects those modifications that the company makes that are not temporary.

Insurance policies may differ in the definition of what constitutes betterment. In general, the term refers to permanent or semi-permanent alterations that an occupant installed, but cannot legally remove. As a tenant makes these modifications to the leased space, the added accessories do not legally belong to the occupant, even though they pay for the installation.

Contact your agent at Professional Underwriters to better understand this specific coverage and how it can apply to your business.