Why do you need Commercial Buildings Insurance?
Commercial buildings insurance is to protect the business premises against damage or destruction. Buildings insurance insures against fire, lightning, storm, and flood, impact from aircraft or vehicles and escape of water from tanks or pipes.
What cover does a Commercial Buildings Insurance policy provide?
Commercial Building Insurance is designed to cover buildings that are used for business purposes typically including shops offices, factories, salons, warehouses, surgeries, restaurants, takeaways, fish & chip shops and so on. In addition to these, insurance for commercial property that is used for leisure, education or religious purposes also tends to be insured under a commercial policy wording.
Purchasers of commercial building insurance tend to fall in to two groups.
- Owner occupiers are people that have bought a building and are going to use it for their own business.
- Landlords are people that have acquired buildings and let them to commercial tenants in return for a rental income.
If you are the landlord of a commercial building it must be made clear to the tenant where responsibility for insurance rests. You may arrange the buildings insurance and charge the tenant the premium but they will be responsible for insuring their own contents and equipment if applicable.
Standard is like the cover you would find with a home insurance policy insuring against fire, lightning, explosion of gas and boilers used for domestic purposes. You may also consider insuring against “special perils” such as explosion, riot, malicious damage, storm, flood, impact by aircraft, road and rail vehicles, escape of water from tanks or pipes and sprinkler leakage.
An alternative option is an “all risks” insurance, which gives wider cover including any accidental damage or loss not specifically excluded in a standard policy.
If your business is in rented premises, check with the building owner that their insurance covers any risks arising from your business activities.
If you work from home, most household policies can be extended to provide the cover you need, but you must discuss this with your insurance provider.
Household insurance does not normally cover any loss of office equipment, nor will it provide public liability cover. In some cases working from home may even invalidate your household insurance, so you are strongly advised to check with your household insurance provider.
How much Commercial Buildings insurance cover will I need?
As with all property owners insurance the buildings should be insured for their full rebuilding cost and not for the market value. There are a number of optional extras available with a commercial buildings insurance policy that are generally available as standard on a let residential policy, the most notable of which is subsidence cover. In addition commercial polices do not normally include loss of rent cover; If the property is let this is a must.
Liability insurance is generally included as standard with a commercial buildings policy, however cover is restricted to the buildings if there are any contents additional cover must be sought to cover the contents liability risk.
If you run your own business from your property, you can take out a commercial combined policy which offers range of protection for your stock, business fixtures and fittings, money, business interruption, goods in transit and liabilities. This type of cover may prove more cost effective than having a separate commercial buildings insurance policy and commercial contents and liability policy.
If there is no business currently operating from your property then you will need unoccupied commercial property insurance. Again this must be a specialist commercial unoccupied property insurance from a provider who would be happy to cover such a risk. Often this type of policy restricts the cover to the basic perils such as fire lightning, earthquake and explosion. In addition there may be additional requirements imposed with regards to security, utilities and inspection.