Monday, 23 September 2013

What Should be Covered in Commercial Property Insurance?

Image: freedigitalphotos
Any owner of commercial premises needs to ensure that they are fully covered against loss or damage, by taking out commercial property insurance. In the case of any unexpected adverse circumstances, this would ensure the business is able, as near as possible, to run in the manner it did before any unfavourable events took place.

But just taking out insurance is not enough. It must be kept up to date and reviewed on a regular basis to ensure the coverage is adequate. Following is a list of items that should be covered by commercial property insurance.

Building Replacement Value

The coverage should go beyond just the value of the building itself, and include its fixtures and fittings, lifts, air conditioning systems and so on. Establishing the true value of the commercial property could be made a lot easier by employing a professional property evaluator.

Trade and Access Extension

As an example, a common cause of damage in a block of flats is leaking pipes. This will only usually be covered, though, if it has been established that the cause is accidental. It could cost up to £15,000 to establish the cause.

Squatter's Rights

A controversial change in legislation back in September 2012 means that it is now illegal to squat in residential premises. But this law does not apply to commercial premises, making them an obvious alternative for people living in that situation. Therefore, if the premises do become empty for an extended period, not only should the premises be made as secure as possible, but it is also important that insurers know, so that appropriate cover is in place for this circumstance.

Inflation Provision

During the course of any repairs, costs can spiral. It is important that the total sum covered is therefore inflated by 50% to cover for this eventuality.

Acts of Terrorism

If the premises is outside one of the big cities it is not likely to be vulnerable to an act of terrorism, but if it should, then the owner is likely to be liable.

Rental Insurance

If the property is at going to be leased out, then the nature of the tenant's business needs to be considered. A high-risk business will, of course, push up the premium. Any loss of income incurred through loss of rent while the premises is being repaired, would also have to be taken into consideration.

Loss Adjustor's Fees

Should a claim exceed £5,000, then employing the services of a loss adjustor could be invaluable in hurrying up any repair work and in locating alternative premises while work is being carried out.

Business Interruption Insurance

Any business will experience considerable disruption in the event of loss or damage. Business interruption insurance will make up for any shortfall in profits while the business is getting back on its feet and also help to offset any unforeseen costs throughout the recovery period.

Commercial property insurance is a vital safeguard for anyone owning business premises thus ensuring the continuation of business if hit by the unforeseen. It is well worth the extra effort should the worst happen.