Over the past two years, UK business insurance companies have suffered adversely from the two severe winters. None of us can forget the way that parts of the UK came to a standstill after the heavy snowfalls and cold weather in December 2010. The insurers, those that cover business assets and buildings, suffered worse from the cold weather. When the weather plummets below minus 3 or 4, this can cause the water in any un-lagged pipes to freeze. It needs to be slow moving or standing water for it to freeze. But, when the temperature stays at minus figures for a few days, or more, it does not take long for pipes both inside and outside to freeze.

Now, I am not an expert on the physics of freezing water, but the problem is that once it starts to freeze this spreads as the temperatures remain below freezing. Frozen water takes up more space than liquid water and if i cannot go any further in a pipe, because it is all frozen, it goes “out the way”. This is either from a split in the pipe, copper, brass and plastic pipes are not that strong or any of the joins. When it remains frozen this is not a problem, but when the frozen water melts the split in the pipe or the broken joint is where the water goes. Even a tiny little split, when faced with water under mains pressure, will release gallons and gallons of water every hour. This usually happens to pipes that are hidden and, if you are not in the premises, even if just overnight it can wreak havoc.

The reason for going through this long explanation is that insurers have suffered statistically high levels of claims for burst pipes and some and actually applying increased excesses, across the board, to all their policies. You need to check whether your business insurance renewal quote documents include an increased excess, because this may not have been made fully clear to you at renewal stage.

A few years ago, before the big buy to let boom kicked off, there were not that many individuals who had residential properties that they owned and let out. Whilst not an exact replica, the UK tended to follow some of the other European countries. Landlords were either individuals or companies with access to large amounts of capital, which meant they could build up large estates of property.

It was not easy for individuals to get finance to purchase other properties. Unless they had a large capital basis you could not get a second home mortgage. Many landlords were “accidental” ones, they were left properties which they rented out or they moved from a flat to a house and managed to keep the first mortgage going.

As the new millennium came and went, the banks started to throw finance at people that wanted to borrow to buy second, third and fourth properties to rent out. As long as you had capital tied up in your current property, in the form of equity, you could borrow. And borrow they did! The rest of course is history, with the bankers thinking that the bubble would never burst.

As we approach the end of 2011 though, we know, as a business insurance broker, that the sensible people out there who did not borrow irresponsibly still have properties and of course they still need to get policies to protect them. The question is, who do you go to when you need to get a quote?

Again, there has been a bit of a sea change in where you can go to get yourself a buy to let insurance quote. Many of the domestic, or home only insurers, are seeking market share of the letting market and offering an adapted home policy for properties with tenants. You need to consider though, what happens when these properties are empty, or you go from a professional tenant to students or let to a local authority?

This is where you need to speak to an independent broker, that specialises in business. Although you may not be earning a lot of money from your let property, as far as we, and the commercial insurance companies we deal with, are concerned, it is a “business”.

If you have one, two or twenty two properties to cover, please call us to see what we can do for you.