Commerical loan for small business

needhelp1_2

Hi, 
Does anyone know if I will be required by a lender to hold professional indemnity insurance to take out a commercial mortgage on my business premises? 
Thanks

retiredbanker1

What kind of business are you running from there?

needhelp1_2

I’m an Architectural technician so I’ll be designing extensions etc

Grumpy_chap

needhelp1_2 said:

Hi, 
Does anyone know if I will be required by a lender to hold professional indemnity insurance to take out a commercial mortgage on my business premises? 
Thanks

PI insurance is to protect you / your Clients from the consequences of your errors should you make any errors.
PI insurance will not be of any direct benefit to the mortgage lender, who will have the security of the premises in the event of default.
There would seem to be no direct benefit to the mortgage lender in requiring that you hold PI insurance.

The mortgage lender may require to see PI (and other insurances) in place for secondary reasons - perhaps establishing the genuine and bona-fide nature of the business.

If you are managing an Architectural Practice, and require business premises to do so, one would reasonably expect that you have PI in place in any case.  Is that not so?

needhelp1_2

Yes that makes sense. Thank you

MEM62

Grumpy_chap said:

needhelp1_2 said:

Hi, 
Does anyone know if I will be required by a lender to hold professional indemnity insurance to take out a commercial mortgage on my business premises? 
Thanks

If you are managing an Architectural Practice, and require business premises to do so, one would reasonably expect that you have PI in place in any case.  Is that not so?

As a QS my wife has it.  I believe it is a requirement alongside with her RICS membership.