Serviced Offices: Insurance Issues Every Operator Faces

Introduction

Serviced offices (and flexible workspace operators) sit in a tricky middle ground. You’re not a traditional landlord, and you’re not simply a tenant either. You may control the building, manage day-to-day operations, host dozens (sometimes hundreds) of member businesses, and provide shared facilities like meeting rooms, kitchens, reception services and IT.

That mix creates a unique risk profile—and it’s why “standard” commercial insurance often leaves gaps.

In this guide, we’ll break down the most common insurance issues serviced office operators face, where claims typically arise, and how to build a sensible insurance programme that protects your property, your income and your liability.

1) Understanding your role: landlord, tenant, operator—or all three?

One of the biggest causes of insurance problems in serviced offices is confusion around responsibilities.

Common operating models include:

• Operator is the building owner (freeholder/leaseholder): You’re responsible for the structure and the business operation.

• Operator leases the building and sub-licenses space: You may be responsible for internal fixtures, contents, services and member safety.

• Management agreement: You run the site on behalf of an owner, sometimes with shared responsibilities.

Insurance must match the legal reality:

• Who is responsible for insuring the building?

• Who is responsible for repairs and maintenance?

• Who carries public liability for common areas?

• Who is responsible for employers’ liability for on-site staff?

If your contract says the landlord insures the building, but you’ve made significant fit-out changes, you may still need cover for tenant improvements and fixtures.

2) Buildings insurance: what counts as “the building” in a serviced office?

Buildings insurance is usually the foundation. But serviced offices blur the lines between structure and contents.

Key questions:

• Does the policy include landlord fixtures (e.g., bathrooms, built-in kitchen units)?

• Are fit-out works included (partitioning, glass meeting rooms, bespoke reception areas)?

• Are signage and external branding included?

• Are plant and machinery (lifts, air conditioning, boilers) covered?

Common buildings claims in serviced offices

• Escape of water from kitchens, toilets and HVAC systems

• Storm damage and roof leaks

• Fire damage (including smoke damage)

• Accidental damage to glass partitions and doors

Underinsurance risk

Serviced offices often invest heavily in fit-out. If the declared building sum insured doesn’t reflect reinstatement cost, claims may be reduced.

Good practice:

• Use a reinstatement cost assessment (especially after major refurbishments)

• Review sums insured annually

3) Contents insurance: reception areas, furniture, and shared equipment

Operators typically own a lot of contents:

• Desks, chairs, sofas and meeting room furniture

• Reception equipment

• Kitchen appliances

• Printers, screens and AV equipment

The challenge is separating:

• Your contents (operator-owned)

• Member contents (tenant/member-owned)

Your policy should be clear that it covers your property, and you should communicate to members that they need their own contents cover.

“All risks” vs “specified perils”

For serviced offices, “all risks” (accidental damage, theft, etc.) is often more practical than a basic specified perils policy—especially if you have high footfall and frequent visitors.

4) Public liability: the number one headache for operators

Public liability (PL) is one of the most important covers for serviced office operators because you control shared spaces.

Typical exposures:

• Slips, trips and falls in corridors, reception, kitchens and stairwells

• Injuries in meeting rooms or event spaces

• Hot drinks spills, scalding injuries

• Accidents involving contractors (e.g., cleaning, maintenance)

The “who is liable?” problem

If a visitor is injured, they may claim against:

• The operator

• The building owner

• A member business

• A facilities management contractor

If your contracts and insurance aren’t aligned, you can end up with disputes and delayed claims.

Good practice:

• Ensure your PL policy includes members/tenants as additional insureds where appropriate

• Use clear indemnity clauses in member agreements

• Keep incident logs and CCTV where lawful

5) Employers’ liability: not optional if you have staff

If you employ anyone—receptionists, cleaners, facilities staff, community managers—you need employers’ liability (EL) insurance under UK law.

Common EL claims:

• Manual handling injuries (moving furniture, deliveries)

• Slips and trips during cleaning

• Stress-related claims in high-pressure front-of-house roles

Also consider:

• Do you use labour-only subcontractors? You may still be treated as the employer.

6) Professional indemnity: when advice and services create liability

Many operators provide services that go beyond “space”. Examples:

• Mail handling

• Reception answering services

• IT and connectivity support

• Event management

• Business support introductions

If a member alleges your service caused them financial loss—missed mail, mishandled deliveries, incorrect admin—professional indemnity (PI) can become relevant.

PI is especially worth considering if:

• You provide managed IT or security services

• You handle confidential documents

• You offer consultancy-style services to members

7) Cyber insurance: flexible workspaces are cyber targets

Serviced offices often provide shared Wi-Fi, guest networks, printers and meeting room tech. That creates cyber exposure even if you’re not a “tech company”.

Common cyber scenarios:

• A member’s device is compromised via insecure network configuration

• Ransomware hits your booking system or door access system

• Data breach involving member contact details

• Payment card data issues if you take payments on-site

Cyber insurance can help with:

• Incident response and forensic investigation

• Legal and regulatory support (including GDPR-related costs)

• Business interruption from IT downtime

• Notification and credit monitoring costs

Good practice:

• Separate guest and admin networks

• Use strong access controls for door entry systems

• Maintain patching and device management

8) Business interruption: protecting your income when the site can’t operate

Serviced offices rely on consistent occupancy and service delivery. If the building is unusable due to fire, flood or major damage, you can lose:

• Licence fees/membership income

• Meeting room revenue

• Event income

Business interruption (BI) insurance is designed to replace lost gross profit or revenue while you recover.

Key BI issues for operators:

• Indemnity period: 12 months may be too short after major damage.

• Alternative accommodation costs: Can you relocate members temporarily?

• Denial of access: If the building is intact but the area is cordoned off, will you be covered?

9) Tenant default and non-payment: what insurance can (and can’t) do

Operators often ask whether insurance can cover:

• Members who stop paying

• Sudden vacancy

• Bad debt

In most cases, standard commercial insurance won’t cover routine non-payment. However, there may be specialist solutions such as:

• Legal expenses cover for debt recovery

• Trade credit insurance (more common in B2B supply chains than memberships)

The practical risk management approach is usually:

• Clear membership terms

• Deposits and payment in advance

• Automated billing and arrears processes

10) Events, third-party hire and meeting room usage

If you hire meeting rooms or event space to external parties, your risk profile changes.

Insurance issues include:

• Higher footfall and unfamiliar visitors

• Alcohol at events

• Temporary staging, AV and lighting

• External caterers

You may need:

• Higher public liability limits

• Event-specific conditions (risk assessments, capacity limits)

• Clear contractual terms requiring third parties to carry their own insurance

11) Contractors and maintenance: liability doesn’t disappear

Serviced offices rely on contractors:

• Cleaning

• Electrical and plumbing

• Fire alarm servicing

• Lift maintenance

• Security

If a contractor causes damage or injury, you may still be pulled into the claim.

Good practice:

• Check contractor insurance (PL and EL)

• Keep copies of certificates

• Use written contracts with clear responsibilities

12) Fire safety, compliance and insurance implications

Insurers expect serviced office operators to manage fire risk carefully because:

• Multiple occupiers

• High turnover of occupants

• Shared kitchens and electrical equipment

Key controls:

• Fire risk assessments and regular reviews

• PAT testing where appropriate

• Clear evacuation procedures

• Proper storage of combustible materials

Non-compliance can lead to:

• Claims disputes

• Higher premiums

• Policy conditions being imposed

13) Security, theft and malicious damage

Flexible workspaces can be targets for theft due to:

• High footfall

• Visitors and deliveries

• Valuable laptops and devices

Even if members own their own equipment, theft incidents can still create:

• Reputational damage

• Liability allegations (e.g., “you didn’t provide adequate security”)

Consider:

• CCTV and access control

• Visitor sign-in systems

• Secure storage options

14) Money and fraud: cash, card payments and social engineering

Many operators take payments by card, handle deposits, and manage supplier invoices.

Risks include:

• Card payment disputes

• Invoice fraud (supplier bank details changed)

• Social engineering scams targeting reception teams

Insurance options may include:

• Crime/fidelity cover

• Cyber cover with social engineering extensions

15) Common policy gaps to watch for

Here are some frequent “gotchas” for serviced office operators:

• No cover for tenant improvements/fit-out

• Inadequate BI indemnity period

• Exclusions for communicable disease impacting event income

• Cyber cover missing despite reliance on IT systems

• No cover for portable equipment off-site (laptops, tablets)

• Contractual liability issues where agreements promise more than the policy covers

16) Building a sensible insurance programme (what to discuss with your broker)

A strong insurance setup usually starts with a clear picture of your operation:

• Number of sites and total floor space

• Occupancy levels and member profile

• Services provided (IT, mail, events)

• Any higher-risk uses (e.g., light manufacturing, labs, medical clinics)

Typical covers to consider:

• Buildings insurance (where responsible)

• Contents insurance

• Public liability

• Employers’ liability

• Business interruption

• Cyber insurance

• Professional indemnity (where services create advice/financial loss exposure)

• Legal expenses

17) FAQs: serviced office insurance

Do serviced office members need their own insurance?

Usually, yes. Members should arrange their own contents insurance for laptops and equipment, and public liability/professional indemnity relevant to their business activities.

Is public liability enough on its own?

Public liability is essential, but it won’t cover your property damage, loss of income, employee injuries, or cyber incidents. Most operators need a package of covers.

Are co-working spaces and serviced offices insured the same way?

They share many risks, but the right insurance depends on your operating model, services, and the type of members you host.

What if a member damages the building?

You may claim under your property policy (if covered) and then recover costs from the member depending on your contract. Clear terms and deposits help.

Does the landlord’s insurance cover my fit-out?

Not always. Many landlord policies cover the structure but exclude tenant improvements. You should check and insure your fit-out where needed.

Do I need cyber insurance if members use their own devices?

Even if devices are member-owned, you may still be responsible for network security, access control systems, and member data you hold.

Conclusion

Serviced office operators face a unique blend of property, liability and technology risks. The biggest insurance issues usually come down to unclear responsibilities, underinsurance after fit-outs, and gaps between what your contracts promise and what your policies actually cover.

If you want to reduce surprises, focus on three things: clarity in agreements, accurate sums insured, and an insurance programme built specifically for flexible workspace operations—not a generic one-size-fits-all policy.

Need help reviewing your serviced office insurance setup? Speak to a specialist commercial broker who understands flexible workspaces, multi-occupancy buildings and the liability issues that come with shared facilities.