If adversity strikes, lack of sufficient commercial property insurance could make or break your business. It is vitally important that commercial property owners have the right insurance to cover for loss or damage. The right insurance will get the business up and running as quickly as possible.
It is vital that business owners carefully check the coverage and exclusions to ensure that it will adequately cover any costs. The following items should be covered by commercial property insurance:
Building Replacement Value
This aspect of the insurance should cover more than just the shell of the building. It should also take into account such things as fixtures and fittings, even air-conditioning units. Sometimes it can be difficult to estimate the exact coverage required in a building's replacement value, and so the services of a professional property evaluator may be worth enlisting.
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
You may have heard that since September 2012 it has been illegal for squatters to squat in a private residential property. No such legislation exists for commercial premises. Not only should you make sure the premises are secure throughout any periods where the building is empty, but also notify your insurance provider to ensure you are covered should your premises be targeted in this specific way.
Inflation Provision
During the course of any repairs, costs can spiral. It is important that the total sum covered is therefore inflated by 50% to cover for this eventuality.
Acts of Terrorism
In areas outside big cities, the threat is minimal, which is reflected by the modest cost of the extension. But it is worth bearing in mind, that should an act of terror occur, unlikely though it is, the owner is likely to be responsible.
Rental Insurance
If the property is at going to be leased out, then the nature of the tenant's business needs to be considered. A high-risk business will, of course, push up the premium. Any loss of income incurred through loss of rent while the premises is being repaired, would also have to be taken into consideration.
Loss Adjustor's Fees
A loss adjustor's expertise could prove very helpful after theft or damage and could speed up any repair work to the premises, particularly if the claim exceeds lb5,000. They may also prove helpful in finding suitable alternative premises in the meantime.
Business Interruption Insurance
Any business will experience considerable disruption in the event of loss or damage. Business interruption insurance will make up for any shortfall in profits while the business is getting back on its feet and also help to offset any unforeseen costs throughout the recovery period.
Clearly, commercial property insurance is essential to any commercial property owner in the event of unforeseen circumstances and for continuation of business.
It is vital that business owners carefully check the coverage and exclusions to ensure that it will adequately cover any costs. The following items should be covered by commercial property insurance:
Building Replacement Value
This aspect of the insurance should cover more than just the shell of the building. It should also take into account such things as fixtures and fittings, even air-conditioning units. Sometimes it can be difficult to estimate the exact coverage required in a building's replacement value, and so the services of a professional property evaluator may be worth enlisting.
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
You may have heard that since September 2012 it has been illegal for squatters to squat in a private residential property. No such legislation exists for commercial premises. Not only should you make sure the premises are secure throughout any periods where the building is empty, but also notify your insurance provider to ensure you are covered should your premises be targeted in this specific way.
Inflation Provision
During the course of any repairs, costs can spiral. It is important that the total sum covered is therefore inflated by 50% to cover for this eventuality.
Acts of Terrorism
In areas outside big cities, the threat is minimal, which is reflected by the modest cost of the extension. But it is worth bearing in mind, that should an act of terror occur, unlikely though it is, the owner is likely to be responsible.
Rental Insurance
If the property is at going to be leased out, then the nature of the tenant's business needs to be considered. A high-risk business will, of course, push up the premium. Any loss of income incurred through loss of rent while the premises is being repaired, would also have to be taken into consideration.
Loss Adjustor's Fees
A loss adjustor's expertise could prove very helpful after theft or damage and could speed up any repair work to the premises, particularly if the claim exceeds lb5,000. They may also prove helpful in finding suitable alternative premises in the meantime.
Business Interruption Insurance
Any business will experience considerable disruption in the event of loss or damage. Business interruption insurance will make up for any shortfall in profits while the business is getting back on its feet and also help to offset any unforeseen costs throughout the recovery period.
Clearly, commercial property insurance is essential to any commercial property owner in the event of unforeseen circumstances and for continuation of business.
About the Author:
Read more about investing in commercial property on the Addicted to Property blog. It will keep you up to date with all the latest industry news.
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