The policy offers cover to protect rental income (both actual and anticipated), where under terms of the lease/license/agreement, the Rent Cessor kicks in if the Tenant cannot occupy the premises in full or part as a result of an insurance claim.
The Policyholder will need to properly assess how many years loss of rent could be incurred by them following a complete loss. Most landlords will rely on the number of years detailed in the lease, but it should be appreciated that the lease will normally reflect the number of years it is expected to rebuild the property. What the lease does not generally cater for, however, is much longer after the property is ready for occupation it may then take to get the income stream back to what it was before the loss.
The additional premium for this extra cover may not be recoverable from the Tenant, but it should not deter the landlord from considering the appropriate protection they require at the very least.
This part of the policy can also can also cover the Landlord’s loss of service charges and should this be required, the sum insured should reflect these additional losses.