Commercial Property Insurance

What is Commercial Property Insurance?

Commercial Property insurance is a form of insurance protection for a commercial property. In the event of damage by an insured risk, such as fire, flood or storm, for example, the insurer will pay out so that you can repair the damage or rebuild the property. You can also cover additional risks such as accidental damage and contents cover.

What is Not Covered?

Each insurer has different policy exclusions so discuss with us the coverage and how wide you want it to be. Generally, a wide coverage will result in a higher premium, but provide you with greater protection against more risks. If the risk is not covered, then the insurer would not pay out in the result of a claim. For example, deliberate damage to the property by you would be a typical exclusion as an insurer would not want to cover this risk.

With all policies you will also find an excess, which often ranges from £50-£500. This is the amount that you would contribute in the event of a claim. The reason insurers have an excess is to reduce the number of frivolous claims, as you would need to contribute financially a small sum in the event of a successful claim. Generally, the higher the excess (the amount you contribute in the event of a claim) the lower the premium.

Leasehold Properties

If you reside in a leasehold property, check with your landlord or the management company first to see if their buildings insurance covers your property. In most cases in a block of flats the landlord will maintain a policy covering the whole building, to which you will contribute through the service charges. If the landlord does not insure your property though, you should make sure you put buildings insurance in place.

Insurance Obligations

You are obliged to be truthful with the insurer and tell them about any material facts. You are also required to ensure that you insure the property for the correct reinstatement value. For example, if a property would costs £500,000 to rebuild you should declare that to the insurer for the reinstatement value. If you insured it for less than the reinstatement value and the property was damaged, the insurer would only pay out a proportion of the claim proportionate to the amount you had declared as the reinstatement value. Having some knowledge of the cost to rebuild your property (which you will find in most valuations) is therefore very useful.

How much does Commercial Property Insurance Cost?

Commercial Property insurance usually costs a lot less than the cost of repairing the property, particularly in the event of catastrophic property damage. It is often considered a very worthwhile investment. The cost of the insurance varies according to a number of factors including: reinstatement value of the property, geographical area, size of the property, risk factors such as the proximity of rivers and lakes, how many years you have held buildings insurance without a claim, and other factors.

You can pay for your insurance in one annual lump sum, or by 12 equal monthly instalments. The lump sum option is generally cheaper, whereas the monthly instalments helps to spread the cost. Policies can be paid for by direct debit, direct transfer, card and cheque.

If you have an insurance renewal coming up, or have not insured your property before, please contact us for a competitive quote.