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Here at Todd and Cue, we offer a vast and diverse range of insurance coverage types and commercial property insurance is yet another integral aspect of corporate insurance that we offer. Whether you own a small business operating out of your home, or your rent, lease or own a larger commercial space – commercial property insurance is essential! Todd and Cue like to educate and inform our clientele about the importance of various insurance forms, therefore, we have put together this informative guide as to why commercial property insurance is so vital…
What is Commercial Property Insurance?
In our current climate, investing in a property for commercial buy-to-let purposes is becoming increasingly popular with landlords looking to extend their property portfolio and revenue or a business owner wishing to commit to owning their own premises. All properties that are being used for commercial purposes, whether they are rented or owned by the company, must be insured on a commercial property insurance policy. It is a very specific policy to protect the owner of a property when they let it out to a third party for commercial use such as retail space, offices or warehousing units.
Commercial property insurance essentially protects commercial properties from such perils as fire, theft and natural disaster and so on. It not only covers the exterior of the building in use, but also its internal infrastructure and contents including equipment, inventory, furniture, and IT equipment. Therefore, if you suffer a loss to your commercial property a sufficient insurance cover can help you repair the damages and corresponding costs and get back in business as quickly as possible.
TAKE NOTE: Commercial property insurance is NOT a legal necessity.
However, many mortgage lenders will require you hold this insurance when lending you money. Further, if you risk not taking out commercial insurance, you will leave your company vulnerable to paying for any damage to your property and will also be liable to any third party compensation claims relating to possible property damages or injuries.
What does Commercial Property Insurance cover?
Examining in greater detail what commercial property insurance covers is critical in demonstrating this covers overall importance. There are two key types of commercial property cover: buildings and contents insurance. Together, these cover your business premises, stock, and equipment against risks like:
- Burst pipes
- Falling trees
- Fire
- Flooding
- Riots
- Storms
- Subsistence Theft
#1 Buildings Insurance
Building insurance covers the cost of repairing or rebuilding your business premises if it becomes damaged or destroyed. Even if you own your business premises outright you should still consider buildings insurance to cover you against the costs of repairs or rebuilding your property. With the cover arrangement, it is crucial that you insure your premises against the costs of rebuilding them, rather than their sales price or current market value.
#2 Contents Insurance
Contents insurance is the other form of commercial property insurance that covers the cost of replacing your business’s stock or equipment if it is damaged or stolen.
With this cover, you should insure your stock and equipment against the cost price, not the sales price, of the items. It is also vital to ensure your insurance covers you when you have more stock on your premises than usual. For instance, in the run-up to Christmas or when you’re trying to quickly sell off seasonal stock.
Within content insurance, there are two types of policies to consider…
- Replacement as new – If an item has been stolen or is damaged beyond repair, this policy allows that item to be replaced with a new one.
- Indemnity policies – if your items have been damaged through wear and tear, this policy accounts for this and will replace the item at its current, not original value.
What does Commercial Property Insurance NOT cover?
Be aware, most buildings insurance policies will not cover:
- General wear and tear that can happen over time, such as an office carpet thinning.
- The damage that has been caused by an act of terrorism. Although, specialist insurers might offer this as an additional premium.
Why is Commercial Property Insurance SO Important?
Commercial property insurance is one of the most important investments you can make within your business. As noted, a comprehensive commercial property insurance cover can protect your business or property from severe financial loss if it becomes victim to an unforeseen circumstance. If you are a manufacturer, non-profit-organisation, retailer or service-orientated business this insurance policy will be a major benefit. The benefits of taking out a commercial property insurance policy include…
- Repair costs
- Replacement costs
- Business interruption coverage
- Unexpected losses
TAKE NOTE: It is crucial to buy commercial insurance, not just for your building but also for the public liability cover. If many members of the public will be coming and going from your property then you will need to be covered in the event of an accident.
We hope that you have enjoyed this informative article on the importance of commercial property insurance. Todd and Cue strongly recommend that you obtain commercial property insurance to give you peace of mind over your commercial property. If you have any other questions and queries regarding this form of insurance or wish to get a free quotation for commercial property insurance please do not hesitate to contact us 0191 482 0050 or email info@toddcue.com.
