Commercial property insurance
Regardless what small business you own, it will not continue as normal if its physical assets were lost in case of fire, explosions, theft, and other perils like floods and earthquakes. So, you need to have a coverage in such cases. Commercial or business property insurance is that type of insurance that is used by companies to have the peace of mind while running its operations. You can apply for this policy if you own the building of the company, lease it, or even if you are working from home. Commercial property insurance is included in risk management strategies of approximately all companies because it protects their assets from accidents. Earthquakes and floods may not be covered by such insurance unless you have an agreement with your provider about that.
When you need commercial property insurance
In UK, commercial property insurance isn’t a legal requirement. However, it is usually considered by most companies as a risk management tool to protect the longevity of their businesses. For example, if you own a restaurant, the kitchen could be described as the main asset of your business that is connected to revenue making. In case of a fire in the kitchen, you won’t be able to continue making revenue until it is fixed. Apply this example to any business with physical assets that are connected to revenue making after considering other possible perils that may happen.
So, commercial property insurance is needed by any business as a coverage if its physical assets that are connected to the revenue stream were destroyed by a peril.
If you have a mortgage, you will find that your loan conditions include a building insurance guaranteed by your mortgage company. But, you may need a separate policy to protect the contents inside your building. The same is applied if you live in a lease hold flat or house, the flat or the house itself is insured by the owner while you insure only what is inside.
What does it cover?
Commercial property insurance covers all types of physical assets that are included in the policy. Luckily, this type is customized in agreement with your provider to cover whatever you want. Coverage will be for equipment including computers and machines, inventory, and furniture that is used for business including desks and chairs.
You will be covered in the following cases:
- Theft: if burglars broke into your company and stole laptops, tablets, or printers, your commercial property insurance policy will enable you to get replacement for the stolen items.
- Accidental damage: if an unintended mistake was made by a business owner or one of the employees and this caused assets to be damaged, your property insurance policy helps to repair or replace the lost assets.
- Vandalism: in case of vandalism at a building, doors and windows are expected to be damaged. In such case, your insurance policy pays for repairmen costs.
You will not be covered in the following cases:
- Cyber-attacks: commercial property insurance cover the loss of physical assets that are used in tech companies such as computers and laptops, but it doesn’t cover the risk of data breaches and cyber-attacks. However, you can protect your company from such risks by acquiring a cyber-liability insurance policy.
- Lost revenues: assets are the means that generate income. When they are damaged, you will lose income. Your commercial property insurance policy pays for the loss of properties, not income. But, if you want a coverage for lost income you need to have a business interruption insurance policy.
- Employee injuries: in case of a fire, some of your employees could be injured. You should have a workers’ compensation insurance policy to cover such liability because it’s not covered by commercial property insurance.
Costs of commercial property insurance
In order to determine the cost of your commercial property insurance, the insurance company assesses the values of your business assets any the risk of any damage that could happen to these assets. These values could be assessed depending on the following factors:
- Construction: the construction of your building is considered to see if it has an upgraded electrical wiring and plumbing and if it was built by fireproof materials. This will reduce the risk of damages and as well reduce the cost of insurance.
- Industry: your type of business is connected directly to risk rates. If you run a restaurant or a factory, you will have higher rate of risks and as will higher cost of insurance.
- Location: if your business location is near storms and natural disasters areas, you are expected to be charged the highest possible cost of commercial property insurance.
- Fire & theft protection: you can reduce the risk of fire and theft by using fire alarms, sprinklers, and security system. So, you can get a lower cost for commercial property insurance.
- Size of business: the larger your company the more elements to be covered and the more cost you will have to pay for insurance.
Most trusted providers
There are a variety of insurance providers who provide a wide range of insurance policies in UK. Concerning commercial property insurance, we packed four of the best providers of this type of insurance in UK.
Allianz is one of the unique insurance providers in UK. It offers a complete property insurance policy that covers both damage of property and legal action. So, you don’t have to pay for a separate liability insurance policy. It covers up to 20 properties. Coverage include loss of buildings and physical assets up to £2 million that could be negotiated to reach £10 million, owners, liability up to £1 million, and loss of rent up to £750,000 a year.
Direct Line for business
This provider is more popular for small business as it can customize policies to meet the needs of all small businesses. There are policies for business owners who own their premises and there are also tailored polices for renters. It can cover all risks including fire, explosions, storms, accidental damages, floods, and earthquakes. The coverage for loss of buildings is unlimited while it is up to £ 100,000 for contents with a £4,000 for each item.
This insurance company is more focused on business insurance. It could be bought as a standalone policy or combined with other products to get a final policy that covers all of your business needs. It provides separate policies to cover damage from fire and floods, accidental damages, rebuilding costs, damaged pipes and cables, equipment breakdown, and business interruption. However, you can apply for a combined policy that protects your business against all of these risks.
AVIVA is one of the largest insurance companies in UK, it provides approximately all types of insurance including commercial property insurance. It provides tailored policies to meet all business’s needs. In a single policy from AVIVA, you can cover up to 20 commercial properties. The insurance business of AVIVA is run by a network of brokers. So, you can buy a commercial property insurance policy through a broker. The available packages provide coverage for liabilities up to £5 and coverage for lost supplies up to £10 and coverage for damaged landscaped gardens up to £25.