Tenant Improvements Insurance for Myrtle Beach Businesses

What Is Tenant Improvements Insurance?

Tenant improvements insurance—also called betterments and improvements coverage—protects the permanent alterations and upgrades you make to a leased commercial space. When you invest in customizing a rental property for your business, that investment becomes part of a building you don't own. Tenant improvements coverage ensures you're compensated if fire, storms, vandalism, or other covered events damage your buildout.

For Myrtle Beach businesses operating in leased spaces, this coverage fills a critical gap. Your landlord's property insurance covers the building structure, but it won't pay for the custom improvements you've installed. Without tenant improvements insurance, you could lose your entire buildout investment with no way to recover it.

Why Myrtle Beach Businesses Need Tenant Improvements Insurance

Commercial buildouts represent serious financial commitments. Tenant improvements insurance protects that investment:

• Your landlord's insurance won't cover your improvements. The building owner's policy protects the base structure—not the custom flooring, interior walls, upgraded electrical, or specialty fixtures you've added. That's your property to insure.


• Buildout costs add up quickly. A basic retail buildout in Myrtle Beach can cost $50 to $100 per square foot. A 2,000 square foot space means $100,000 to $200,000 in improvements that need protection.


• Damage forces difficult choices. Without coverage, you'd need to rebuild your space out of pocket, operate in a damaged environment, or break your lease and start over elsewhere. None of these options are good for business.


• Lease obligations continue. Most commercial leases require you to maintain and restore improvements. If your buildout is damaged, you're still obligated to fix it—tenant improvements insurance provides the funds to do so.


• Coastal weather creates exposure. Wind, water intrusion, and storm damage threaten leased spaces throughout the Grand Strand. Tenant improvements coverage responds when these events damage your customized space.

What Does Tenant Improvements Insurance Cover?

Tenant improvements coverage protects permanent alterations and fixtures you've installed in a leased space. Common covered improvements include:

Interior construction. Partition walls, dropped ceilings, built-in shelving, custom cabinetry, and room configurations you've created within your leased space qualify as tenant improvements.

Flooring installations. Hardwood, tile, carpet, epoxy coatings, and other flooring you've installed over the landlord's base floor covering are covered.

Electrical and lighting upgrades. Additional circuits, upgraded panels, specialty lighting, and electrical infrastructure beyond what the landlord provided fall under tenant improvements coverage.

Plumbing additions. If you've added sinks, restrooms, floor drains, or other plumbing fixtures for your operations, these improvements are covered.

HVAC modifications. Supplemental air conditioning, ventilation systems, exhaust hoods, and climate control upgrades you've installed qualify for coverage.

Specialized fixtures. Restaurant equipment that's permanently installed, salon stations, medical exam room buildouts, and other industry-specific improvements are protected.

Covered Perils

Tenant improvements insurance responds to the same perils as standard commercial property coverage. Depending on your policy form, covered causes of loss typically include fire, lightning, windstorm, hail, smoke damage, vandalism, theft, water damage from burst pipes, and vehicle impact. Special form coverage—which most South Carolina businesses choose—covers all perils except those specifically excluded.

What Tenant Improvements Insurance Does Not Cover

Standard exclusions apply to tenant improvements coverage just as they do to other commercial property insurance:

• Flood damage. Rising water, storm surge, and surface flooding require separate flood insurance.


• Wear and deterioration. Normal aging, gradual damage, and maintenance issues aren't covered.


• Design or workmanship defects. If improvements fail due to poor construction or materials, that's not an insured loss.


• Movable property. Furniture, equipment, and inventory that isn't permanently attached falls under business personal property coverage, not tenant improvements.

How Tenant Improvements Coverage Valuation Works

Tenant improvements have a unique valuation consideration: your interest in them decreases over time. Since improvements become part of the building when your lease ends, their insurable value relates to your remaining lease term.

Original cost less depreciation. Some policies value improvements at original cost minus depreciation based on your remaining lease term. If you've used half your lease, you might recover half your original investment.

Replacement cost coverage. Better policies offer replacement cost coverage that pays to restore improvements to their pre-loss condition regardless of lease term remaining. This is the coverage most Myrtle Beach businesses should carry.

Unamortized value. Your improvements may be valued based on their unamortized book value—what remains on your accounting books after depreciation.

Understanding how your policy values tenant improvements matters significantly when filing a claim. Work with your agent to ensure your coverage approach matches your expectations.

Tenant Improvements vs. Business Personal Property Coverage

These two coverage types protect different categories of assets:

Tenant improvements coverage applies to permanent alterations attached to the building—walls, flooring, built-in fixtures, and installations that would stay if you moved out. These become part of the real property even though you paid for them.

Business personal property coverage protects movable items—desks, computers, inventory, equipment, and furnishings you'd take with you when relocating. These items remain your property regardless of lease terms.

The distinction matters because some items fall into gray areas. A free-standing refrigerator is business personal property; a walk-in cooler built into the space is a tenant improvement. Restaurant equipment bolted to the floor might qualify either way depending on how it's installed. Your insurance agent can help classify assets correctly.

Lease Requirements and Tenant Improvements Insurance

Commercial lease agreements often dictate insurance requirements for tenant improvements:

Who insures the improvements. Some leases require tenants to insure their own improvements. Others require the landlord to insure all building property, including tenant buildouts, with tenants reimbursing the premium cost. Review your lease to understand your obligations.

Restoration requirements. Many Myrtle Beach commercial leases require tenants to restore damaged improvements regardless of fault. Tenant improvements coverage provides funds to meet this obligation.

Surrender conditions. Some leases require you to remove improvements and restore the space to its original condition when you leave. Others let improvements stay with the building. This affects how you should value and insure your buildout.

Landlord approval requirements. Leases typically require landlord approval before making improvements. Document all approved work thoroughly—these records support insurance claims and establish what qualifies as tenant improvements.

How Much Does Tenant Improvements Insurance Cost in South Carolina?

Tenant improvements coverage is typically included within your commercial property policy or business owner's policy rather than purchased separately. The premium depends on several factors:

• Value of improvements. Higher buildout costs mean higher coverage limits and higher premiums.


• Building construction and location. A space in a fire-resistive building in Conway costs less to insure than frame construction near the Myrtle Beach oceanfront.


• Coverage form. Special form (all-risk) coverage costs more than basic named-peril coverage but provides broader protection.


• Deductible selection. Higher deductibles reduce premium costs but increase your out-of-pocket expense after a loss.

For most businesses, adding adequate tenant improvements coverage to an existing commercial property policy adds relatively little to the total premium—often a few hundred dollars annually for $50,000 to $100,000 in coverage. Given the buildout investment this protects, the coverage is well worth carrying.

Why Work with Moore & Associates for Tenant Improvements Insurance

Moore & Associates has served Myrtle Beach businesses since 1979. As an independent insurance agency, we work with multiple carriers to find commercial property coverage that properly addresses your tenant improvements exposure. We're not limited to one company's forms or coverage options.

Our local agents understand commercial lease arrangements along the Grand Strand. We help businesses from North Myrtle Beach to Pawleys Island evaluate their buildout investments, coordinate coverage with lease requirements, and ensure improvements are properly valued and insured.

Get a Tenant Improvements Insurance Quote in Myrtle Beach, South Carolina

Our tenant improvements insurance agents serve Myrtle Beach, South Carolina and surrounding areas including North Myrtle Beach, Atlantic Beach, Conway, Surfside Beach, Murrells Inlet, Litchfield, Pawleys Island, and Georgetown. Contact Moore & Associates today for a free quote.