What is Commercial Property Insurance?
Commercial Property Insurance protects the property that you own and operate your business from (e.g. your office building, shop or home). This kind of insurance protects you against disruption and unexpected damage to the business if something happens to the property. The most common types of damage that fall under this kind of insurance are accidental and criminal damage.
If you rent your workspace then you’ll need to purchase business contents insurance, but are not required to purchase commercial property insurance as this should be covered by your landlord. It’s highly recommended that you get contents cover for your business whether you own the property or not – see our business contents insurance page for more information.
This is pretty much what it says on the tin, the cost of rebuilding your property or for repairing partial damage. It is paramount you are insured for the full rebuild value to make sure you can properly rebuild in the instance that the building(s) is/are destroyed. If you are uncertain of your rebuild cost there are plenty of calculators on the internet that can help you get an accurate cost.
Buildings insurance covers the cost of repairing or rebuilding your business premises if damaged or destroyed.
Contents insurance covers the cost of replacing your business’s stock, equipment and fixtures and fittings if it is damaged or stolen.
This also known as Loss of Profit or Consequential Loss Cover and is pivotal to the future of a business if serious physical damage occurs. It is an important feature of your future and should be carefully thought about and
The cover is concerned with paying for the consequences of a material damage loss and enables the insured to recover loss of gross profit due to reduction in turnover and reasonable additional expenditure incurred in
minimising a reduction in turnover. Different forms of cover are available, depending upon the nature of the business – Gross Profit is most suitable for most industrial and manufacturing businesses, but others, where the business is not dependent on a fixed site are possibly better suited to Increased Cost of Working – the inconvenience factor of temporary disruption.
The length of the indemnity period – possibly longer than one year and making provision for key staff to be paid during interruption and auditors fees in preparation of a claim, all need to be taken into account.
Cover is on an ‘all-risks’ basis and covers goods whilst in transit anywhere in Great Britain including loading, carriage, unloading or temporary garaging of vehicles and trailers. There are two types of policy issued:
- own vehicles with a set sum insured per vehicle
- all goods dispatched by the insured in their own or
- Hauliers vehicles or by rail or post. The sum insured is per consignment.
Exclusions would include:
- Goods of a dangerous nature
- Cash, currency, bonds, securities, precious metals etc.
- Theft or pilferage by insured’s own employees
- Samples accompanying commercial travellers
- Theft from an unattended vehicle overnight unless garaged or in an approved security compound. Overnight is usually between the hours of 2100 and 0600.
- Vehicles not alarmed or secured properly are not covered whilst unattended
Frequently Asked Questions
We offer commercial property insurance to a variety of different types of businesses who own property that they use for business purposes. This could be anything from a small newsagents to a franchise of hot food establishments.
Property Insurance policies may cover different perils, but generally, covered events include loss or damage caused by fire, theft, vandalism, and windstorms.
Your client’s Property Insurance premium depends on many factors, such as the quality of their building’s construction, the type of business they run, the tenants they share the space with, and their risk management measures.
If you are taking out contents insurance you should insure stock against its cost price, not its sale price. If there are times when you have more stock on your premises than usual, for example in the run-up to Christmas, you should make sure your insurance covers this.
General wear and tear over the years is not covered by a commercial property insurance policy. Age related issues cannot be insured, it is only in the instance of accidental or criminal damage that a claim can be made.
Defective workmanship is also not covered by this policy. If you hire a plumber to do work on a bathroom in your property and things go wrong, the claim has to be made against the plumber, not your own insurances. It's sensible to always check that tradesmen have the correct insurances in place before hiring them.
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A Fair Presentation of the Risk
At the heart of insurance contracts is an obvious truth: you have an enormous advantage over the insurer. You know all about your business, its history, processes, people and management, but the insurer knows nothing – other than what you tell them.
You have a statutory duty to make a fair presentation of the risk. You must tell the insurer:
• Every material circumstance which you know or ought to know and/or
• Sufficient information that would cause the insurer to make further enquiries, if neccessary, to review those material circumstances
• You are deemed to have the knowledge of the company’s senior management.
• You are deemed to have the knowledge of the person arranging the insurance (who is deemed to be a senior manager under statute).
• Anything that can be discovered by a reasonable search.
A failure to make a fair presentation of the risk gives the insurer various remedies, depending upon the nature of the failure, from avoiding the contract and not paying claims to modifying the basis of settlement.
Examples of Misrepresentation
It is often easier to demonstrate the consequences of risk presentation failure by example rather than theory. Here are some real life examples of typically forgotten or unrevealed material facts which later caused huge problems and repudiated claims:
A reprocessing plant did not reveal a series of small fires during their insurance year.
Following repeated false alarms, a retailer didn’t reveal that Police Response had been withdrawn.
A restaurant omitted to reveal repeated minor floods from an upstairs nightclub.
A construction company didn’t reveal potential employee claims recorded in their accident book.
A company failed to reveal written warnings to an employee over repeated dangerous driving.
A company failed to reveal that it had been ‘struck off’ by Companies House and was trading as a new legal entity under a different designation.
Compiling the Risk Presentation: an ongoing process
The compilation of risk information for presentation to an insurer might be thought to be simply contained in a proposal or risk presentation form, however, such forms are not exhaustive and cannot take account of circumstances which change beyond their
compilation. Moreover, merely referring insurers to your website or dumping data is not making a fair presentation of the risk. ’Fairness’ is a subjective test but it would certainly involve simplicity, clarity and relevant selection.
Ongoing communication is vital, because the duty to disclose material circumstances is ongoing throughout the insurance year and at renewal of the insurances.
It is not possible to overstate the importance of researched, adequate risk presentation – there have been countless legal disputes, repudiated claims, ruined businesses and lives arising from the simple failure to reveal all the facts to an insurer. A failure to present risk adequately is a bigger risk than the risk you present.
It doesn’t matter that the failure is innocent, something overlooked, forgotten or discounted as unimportant – it might be important to the insurer, in which case it must be revealed.
Should there be anything not yet disclosed, or that you are unsure would influence your insurers about this insurance tell your broker/insurer immediately.
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Working With Us
The Business Insurance Bureau conducts both client and market research to identify solutions to the needs of an almost exclusively business clientele. We will make a recommendation once we have assessed your demands and needs.
All premiums due to insurers must normally be paid by you on or before the date that cover commences. Where alternative methods of payment are available these will be discussed with you so that arrangements can be put in place by the due date.
We are registered with the Data Protection Registrar. We will ensure that any information obtained from you is treated by us and anyone else involved in arranging, considering to arrange or managing your insurance, as Strictly Private and Confidential. We will not provide your information to anyone else unless we:
have your permission to do so, or -are required to by the FCA, or -are required to do so by law, or -are required to do so in the normal course of arranging or negotiating and maintaining, or renewing financial services products which we may from time to time approve.We take appropriate steps to ensure the security of any money, documents, other property or information handled or held on your behalf.
All information in any form, with the exception of policy documents and certificates issued on behalf of insurers and supplied by us, to you, should be treated as Strictly Private and Confidential and not be released directly or indirectly to any other party, without our explicit consent.
Note: in transacting your insurances with The Business Insurance Bureau, you are deemed to have accepted our Terms of Business. Your accepting of these Terms of Business does not affect your statutory rights.
You must notify us as soon as possible of a claim and circumstances which may give rise to a claim. In the event of a claim you should contact this office and we will promptly advise you and if appropriate, issue you with a claim form and pass all details to your insurer. You should not admit liability or agree to any course of action, other than emergency measures carried out to minimise the loss, until you have an agreement from your insurer. We will remit claims payments to you as soon as possible after they have been received on your behalf. In the event that an insurer becomes insolvent or delays making settlement we do not accept liability for any unpaid amounts.
You would have the right to cancel a policy within 14 days of its inception or upon receipt of the policy documentation whichever is the later. You would as a Consumer and without providing a reason, cancel the policy by confirming this is in writing to the address of our office through which your policy was placed. Any policy documentation and in particular any legal document, i.e. Certificate of Motor Insurance, Employers Liability Certificate, MUST be returned with your instruction to cancel. By exercising your right to cancel the policy, you are withdrawing from the contract of insurance.
Our services may be terminated without cause or penalty by giving one months’ notice in writing. In the event that our services are terminated by you other than at the expiry of the policy we will be entitled to retain any fees and all of the brokerage payable. The responsibility for handling claims reported after the date of termination shall in the absence of an express agreement be the responsibility of the party taking over the role.