Anyone who owns and runs a business from a fixed business premises should consider taking out commercial property insurance. Or they may be forced into taking it out by their commercial mortgage provider. In this concise post, we’ll explain what commercial property cover really is, what it insures you against and the extras that can be added.
What is commercial property insurance?
Commercial property insurance is an insurance policy that protects your business premises and business assets (including stock) against damage and theft. Using residential property insurance on a business premises won’t suffice if you are running a business, so you’ll need to consider commercial insurance options.
Commercial property insurance is not a legal requirement, but most commercial finance lenders will only provide loans to businesses that have at least insured the building.
Types of commercial property insurance
Commercial property insurance can be split between commercial building insurance and commercial content insurance. You can easily find policies that cover these individually, or you can find policies that cover both the commercial building and your contents.
You might only need commercial contents insurance if you rent the business premises. In this situation, it would be the building owner’s responsibility to have building insurance.
What does commercial property insurance cover?
Commercial building insurance covers your business against the cost of repairing the property should it be damaged by natural disasters, electrical system malfunctions causing fires and sometimes accidental damage. It doesn’t typically cover general wear and tear or acts of terrorism. Although the latter might be included as a paid extra.
Commercial contents insurance will cover your business against the cost of repairing or replacing business assets and business stock if they are damaged or stolen. You should always insure stock against the price you bought it for, rather than the price you sell it for. And make sure your insurance covers the level of stock you have on your premises, which may be increased over busier periods like Christmas.
Commercial insurance extras
Business interruption protection is an optional extra to commercial property insurance. It provides you with additional financial security should your business processes and profits be affected by damage to your building, assets or stock.
You’ll receive money when your pre-tax profits are affected or when your running costs are increased. This can be highly beneficial if damage to your premises was to prevent you from operating. It may even stop your business from having to close permanently. The specifics of this additional cover will be determined by your policy.
Commercial insurance brokering services
For professional help protecting your business, why not speak with one of our certified insurance brokers? We always take a detailed and personal approach to secure commercial insurance by getting to know your business first. Speak with a Moneysprite adviser today.