Planning commercial property insurance to protect your business
Whether you run a ‘bricks and mortar’ business that serves customers on-site, or you are part of the service sector meeting customers’ needs remotely, your premises and equipment are one of the most important assets.
There are many numbers of ways those assets can be damaged or destroyed. Fire, flood, vandalism, storms, falling trees, subsidence and theft are just some of the more common, and finding yourself under-insured could spell disaster for your business.
Who needs commercial property insurance?
Quite simply, anyone with business premises that they trade from. For your peace of mind and to make sure your business can continue if the worst happens, your building and its contents must be covered by a comprehensive commercial property insurance policy.
At Stanmore Insurance Brokers we are experts in creating tailored contents and building insurance packages for businesses.
The more information you can provide, the better we can tailor the right policy for you. So here are some of the most important things to think about when planning your cover.
Buildings insurance cover
If you own the building your business is based in, it is likely to be the most valuable asset you have. Commercial property insurance is not a legal requirement, but most commercial mortgage providers will make it a condition for any loan they give you.
Even if you have paid up your mortgage and you own the building outright, we still strongly recommend you insure it to its full value, as disaster can strike at any time.
The rule of thumb here is to base your insurance requirement on a ‘worst-case scenario’. The amount you insure your premises for should cover the cost of rebuilding them from the ground up, including demolition and site clearance beforehand.
Bear in the mind the cost of rebuilding will probably be higher than the market value of your property., We recommend you get a building valuation at least once every 5 years and adjust your contents and building insurance cover accordingly.
Why do you need Property Damage Insurance?
As your business grows it is likely you will invest more and more into your building premises or office. Whether you need to increase stock levels, make room for new staff or purchase new equipment to keep up with demand. The value of property held with your premises will likely increase over time. Property Damage insurance helps your business recover if some or all of these items are damaged or destroyed.
Real Life Property Damage Claims
Flood at a nursery client:
Operating from the basement of a college building, Creche-n-Co suffered a major flood on Boxing Day 2015 destroying all of their contents. As they had regularly reviewed their sum insured their cover was sufficient so that they could replace everything they had lost.
Your account handler
It’s vital that you tell us whenever you make a change to your business that way we can make sure that you are suitably covered. You might be stock-piling stock ahead of a big sales push or perhaps you’ve taken on 3 new members of staff and have three new desks and computers. That way we can make sure your contents insured accurately reflects exactly what is inside your building. – Sam Budak
Commercial buildings insurance for tenants
If you rent your business premises rather than own them, you still need to be clear on what you must be insured for in the event of fire, flood or other damage.
For example, the terms of your lease might say you are responsible for covering the cost of redecoration and refurbishment, which itself could run into many thousands of pounds if the damage is serious.
Any changes you have made to the building with the landlord’s permission, such as adding new toilets or a kitchen, are likely to be your responsibility too.
Again, give us as much detail as you can about which parts of the building you need to insure. That way you avoid paying additional premiums for areas you are not responsible for or, even worse, being under insured in the event of a claim.
What is not covered by the property insurance?
Commercial building insurers will often combine storm, flood and fire insurance in a single product to cover the most common risks.
However, most building insurance policies will not cover you for general wear or against acts of terrorism.
Sadly, the impact of a terrorist attack is something more and more businesses are having to think about, especially in city centres and near high profile targets like stations or airports.
Because of that, many providers are now offering a terrorism extension to their commercial buildings cover.
This cover not only insures against damage to the fabric of the building. It can also be set up to pay out for loss of business if you are unable to trade in the aftermath of an incident, as many businesses were following the Manchester Arena bombing and Borough Market attacks.
Please speak to us if you would like to know more about specific cover for potential terrorism.
Contents, equipment and stock insurance
From desks and chairs to computers and other office equipment, you will be surprised how much it would cost to replace the contents of your business if they were destroyed or damaged beyond repair.
That is why we advise all our customers to take a quick look around their building and add up the true value of everything they have acquired over the years. In particular, you should note down the value of:
• Freestanding furniture such as cabinets, bookcases, chairs and desks
• Your current levels of stationery
• Artworks, ornaments and antiques
• Electronics, such as your computers, printers and telephones
• Specialist equipment for your sector (machinery, kitchen equipment, the tools of your trade)
• The office fridge
• Cutlery and crockery
• Items stored in sheds or other outbuildings
If you regularly store stock that you buy and sell on your premises, that will add even more to the value of your business contents and require even higher levels of cover. We suggest you take an average stock-in-trade level to give us an insured value, based on its cost price rather than the price you sell it at.
If there are times when you have more stock on your premises than usual, for example during your peak-sales months or in the run up to Christmas, you should allow for this in your calculations, or update us at the time so we can adjust your cover to account for its added value.
Get in contact
Talk to Stanmore the insurance people about Business Property Insurance Cover now – call our team on 01204 570 370