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
Commercial insurance needs to go beyond covering just for the structure of the premises and will have to include such things as fixtures and fittings, air-conditioning and so on. It would be prudent to employ the services of a professional property evaluator to get a realistic estimate of the costs involved.
Trade and Access Extension
Suppose something goes wrong with the pipe work in a large block of flats. The insurance will only generally cover accidental damage. Establishing whether or not the damage was accidental or otherwise could cost lb15,000 in such a situation.
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
When things go wrong after loss or damage, then repair work can cost more than anticipated when unexpected issues arise. It is vital, therefore, to allow for this by inflating the cost of the sum covered by the insurance by 50% thus protecting yourself from under insurance.
Acts of Terrorism
This is not likely to be a problem if your premises is outside a major city, but should it occur, you are likely to be liable. Since the extension is available usually for a modest sum, it may be worth taking it out.
Rental Insurance
If you are going to lease out the property to a business, it is important to ask yourself if the business may be described as high-risk. If it is, then the premium will be affected. You will want to ensure you are covered for any loss of rental income incurred through a period of repair after damage and while the property is unoccupied.
Loss Adjustor's Fees
Should a claim exceed lb5,000, 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
During an upheaval caused by damage to premises, business is bound to be interrupted. Business interruption insurance will ensure you are covered for any loss in pre-tax profits incurred while the premises is being repaired and may help with any additional costs.
Clearly, commercial property insurance is essential to any commercial property owner in the event of unforeseen circumstances and for continuation of business.
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
Commercial insurance needs to go beyond covering just for the structure of the premises and will have to include such things as fixtures and fittings, air-conditioning and so on. It would be prudent to employ the services of a professional property evaluator to get a realistic estimate of the costs involved.
Trade and Access Extension
Suppose something goes wrong with the pipe work in a large block of flats. The insurance will only generally cover accidental damage. Establishing whether or not the damage was accidental or otherwise could cost lb15,000 in such a situation.
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
When things go wrong after loss or damage, then repair work can cost more than anticipated when unexpected issues arise. It is vital, therefore, to allow for this by inflating the cost of the sum covered by the insurance by 50% thus protecting yourself from under insurance.
Acts of Terrorism
This is not likely to be a problem if your premises is outside a major city, but should it occur, you are likely to be liable. Since the extension is available usually for a modest sum, it may be worth taking it out.
Rental Insurance
If you are going to lease out the property to a business, it is important to ask yourself if the business may be described as high-risk. If it is, then the premium will be affected. You will want to ensure you are covered for any loss of rental income incurred through a period of repair after damage and while the property is unoccupied.
Loss Adjustor's Fees
Should a claim exceed lb5,000, 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
During an upheaval caused by damage to premises, business is bound to be interrupted. Business interruption insurance will ensure you are covered for any loss in pre-tax profits incurred while the premises is being repaired and may help with any additional costs.
Clearly, commercial property insurance is essential to any commercial property owner in the event of unforeseen circumstances and for continuation of business.
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Discover more about investing in commercial property on the Addicted to Property blog. It's the only way to stay up to date with all the latest industry news.
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