Commercial Property Insurance
Commercial property insurance covers the cost of repairing or rebuilding your business premises, your fixtures, fittings or stock in the event of a number of risk losses including:
- Water damage
- Storm damage
- Subsidence – landslip and ground heave
As with your normal home insurance, cover is broken down into building and contents cover.
Buildings insurance covers the cost of repairing or rebuilding your business premises if damaged or destroyed. Though buildings insurance is not required by law, it’s strongly suggested that you take out cover.
Even if you own your building outright, you will still require cover in the event that you needed to repair or re-build your building. If you rent your business premises, it’s the duty of the landlord to ensure that buildings cover is provided. You may however wish to discuss with them the level and detail of cover required to ensure that you believe it’s sufficient.
Remember that the important number to insure when looking at your building is the cost to rebuild it, not its current market value.
Unless you have specifically requested it, and therefore paid an additional premium, most commercial building will not cover you for:
- General wear and tear – everyday things that happen to your property over time such as carpets or wall coverings discoloring.
- Acts of war or terrorism – buildings insurance policies usually exclude damage caused by terrorism, but specialist insurers can provide cover for commercial properties for an additional premium.
Your commercial contents insurance covers you for the cost of replacing damaged or stolen items within your premises. Importantly for some businesses, this includes items of material or finished goods held in stock.
It’s important to discuss the valuation of your stock and equipment with the insurer or broker when arranging cover. If your business has any cyclical variations be sure that these peak periods are covered.
In the event of a significant loss event hitting your business, for example a large fire, the loss of your buildings or stock may actually be of secondary importance in a financial context. Your inability to trade will hit profits for some time after the event and there may also be additional costs to cover in terms of third party fees and business continuity plans.
You can insure against these losses by taking out business interruption or continuity cover. This type of policy will cover you for the loss of sales and profits during the period that you’re unable to operate, as well as any overheads such as rent, compulsory rates and wages you’ll have to carry on paying even while you’re not up and running.