Archive for the ‘commercial building insurance’ Category

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Commercial building insurance – theft of lead claims continue to rise

Monday, January 30th, 2012

Having worked in the past for one of the largest insurers of Church and religious properties, theft of lead from roofs has always been a big problem. In the past, and I am talking about 20 years ago, the cost of the lead was never the real problem, it was the damage caused as a result of the theft.

In 2012, not a lot has changed, in that the damage caused by the actual theft far outweighs the cost of the actual stolen lead. But, the difference is that the lead is a lot more expensive per kilo than it ever was. So are all other types of metal, it is not just the non-ferrous metals, nowadays any type of metal has a better value than ever before. This is why people have even taken to stealing metal drain covers from the streets.

The two problems, with the consequent cost, is that the thieves tend to damage the property when they are stealing the metal. Then, the actual property owners may not find out about the theft until such time as a lot of water suddenly starts appearing through a ceiling or floor. The theft of the roofing metal could have occurred many weeks before, it is not until the first major storm occurs that the real damage happens.

The question is, what can be done to prevent these losses? We have had one commercial property owner who have had three theft losses in the last three years. The total cost to insurers is going to be in excess of £100,000. Each claim has resulted in a roof being replaced with a zinc coated metal. The cost of this is much less than lead and the theft attractiveness is lower. But, the thieves do not always understand what is and what is not a metal worth stealing. As a result of these claims, the insurers increased the excess (the amount the insurers pay) to £5,000 each and every loss. It is in in the insured’s interest to reduce the chance of a loss.

There is one option, that is both cheap and is actually effective. We have all seen the vans driving round with the stickers on the back stating that there are not tools kept in the vehicle over night. A couple of very cheap plastic signs can be added to buildings stating that, there is no metal on the roof. Insurers will not recommend this, but it could be a good way of stopping the thefts in the first place. The exact wording would need to be thought through, depending on each property, but it may be worth considering.

If you want a commercial building insurance quote, that will actually provide cover for theft of metal and the consequent damage, give Businessinsure a call to see what we can do for you. We are an independent business insurance broker, we have access to a number of insurers so can always look around to get you the right quote.

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Commercial property owners insurance – loss of rent

Friday, December 23rd, 2011

When looking for a commercial property owners insurance quote, you tend to have two options available as far as adding loss of rental income is concerned. Certain insurers will include this cover as standard, for a percentage, usually 20, of the total sum insured. For others, you need to actually declare a loss of rental income to include this cover.

Before we discuss the differences, a quick note on exactly what loss of rental income is. If you, or a business, owns an asset in the form of a building, you are usually looking to rent this and receive income. The rental income is known as the yield, or earnings. The hope of course is that a combination of increasing value of the property and rental income exceeds the cost of any financing or loan that is taken out to purchase the property. Given that the first has almost been non-existent in the past four years, it is even more important to ensure adequate insurance cover for the latter.

If there is a fire, for example, your tenant will have to move out and more than likely cancel the tenancy agreement they have with you and take out another one. As you are unable to let the property, you are not fulfilling this side of the contract and your tenant is quite entitled to go elsewhere. Therefore, you are left with a property that you are not receiving any rent for. It needn’t just be a fire, it could be a flood, or burst pipe that causes your tenant to move out. This can take any number of months and sometimes years to resolve.

This is where you really need to speak to an independent business insurance broker to ensure that you have adequate protection in the form of rent paid. Certain policies that only offer a 12 month indemnity period, will only pay rent for the maximum period of one year. When you think about a disaster, with a property destroyed the time taken to clear the site, get architects, surveyors and local authorities involved and renewed planning permission and then get the property built – it can take over twelve months. You need to ensure you have cover for this extended period of time.

Posted in business insurance broker, commercial building insurance, commercial buildings insurance, commercial property insurance, commercial property insurance quote, commercial property owners insurance | Comments Off

Professional indemnity insurance – which limit to choose?

Thursday, November 17th, 2011

If we are approached for a commercial building insurance quote, one of the main questions we will ask is “how much is the sum insured”? Unlike cover for your house, where there may be a blanket limit of £400,000 or £500,000, for commercial properties you will declare the amount. Whilst it is not easy to get this figure, the policy is very clear, you are covered for x amount, as long as it represents the correct rebuilding cost.

But what has this to do with professional indemnity insurance? Not a lot, except to show that with building insurance, you can actually, see  and feel the “thing” that is insured. You can pay a surveyor to give you that valuation to confirm exactly how much you should insure for.

Now, if you are looking for professional indemnity insurance, how do you know what amount to insure for? If you are undertaking a contract for a customer and they are insisting on the cover being in force, then your job may be easier if they put a limit in writing to you. But, if they don’t or you are just looking for a professional indemnity quote, how do you decide what limit to go for?

The main insurers we use, will quote from £100,000 up to £5,000,000 any one claim. One quote this afternoon went from £290.00 at £100k to £4,3970.00 at £5m. You can see that there is a big difference in premium because there is a big difference in the potential cost to the insurers.

What you do not want to do is over insure yourself, the insurers of course enjoy this, because they get more money. Our job, as a business insurance broker is to get you the best deal, price and cover wise, for the insurance you need. Our advice is that you have to sit down, maybe with your colleagues and work out the worst case scenario cost and the average case scenario loss. Then, speaking to your broker you have to work out whether you go for the higher or lower or somewhere in between. It will also depend on whether your quote or cover is any one claim (better) or in the aggregate (less better!). As ever, get advice from a professional independent business insurance broker.

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Unoccupied property insurance – check the warranties

Monday, July 25th, 2011

There are two types of unoccupied property insurance policy. Firstly, you can get a bespoke policy where you declare at the outset, or start, of the cover that the property is unoccupied, untenanted or vacant. The second option is where you have a standard policy, that covers a building being let or tenanted but, if the property becomes empty, usually for more than 30 days, then additional terms and conditions kick in.

On the first option, it is usually very clear what the terms, conditions, warranties and excesses are, or it should be. The normal option for getting this kind of cover is to go to a business insurance broker. They will look into providing you with a quote, based on the property being annually unoccupied.

At quote stage, under the rules and regulations laid down upon us, we need to explain to you the details of the what is, and what is not covered. Usually, for an annual unoccupied property, you will have to do certain things for the cover to operate. One of the things will be a warranty relating to security, water and inspections. You will normally need to drain the water tanks, or turn off the water if there is no water tank, ensure the property is secured, including closing letterboxes (to prevent arsonists setting fire to materials and then stuffing in the letterbox) and lastly you will need to regularly inspect the property.

These are standard across the market.

The ones you need to watch out for are the standard commercial property owners insurance policies as many of these have their unoccupancy warranties buried deep in the policy wording. It is only if the property becomes empty and you have a loss do you realise that you are not covered.

If you have a let property and for whatever reason it is going to be empty for an extended period, speak to your broker and ask them how this affects your insurance cover.

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Commercial Property Owners – information required

Thursday, July 21st, 2011

If you are looking for a commercial property owners insurance quote, there are three main ways to go about this.

Firstly, you can phone an online provider, whether this be a broker or a commercial insurer direct.

Secondly, you can visit one of the many websites that state they will compare costs for you.

Thirdly, you can visit your local broker and obtain a quotation face to face.

In addition to these three, there are many different smaller methods such as your bank or mortgage company providing you with a quote.

Whichever of the options that you choose to follow, there will be a differing set of questions asked of you. The reason for this is that ultimately it will be a business insurance company that will provide you with the quote. The different companies all want slightly differing information, depending on their underwriting and risk acceptance criteria.

The main question though, for commercial, industrial or business building insurance is the rebuilding cost. This is the amount of money it would cost, at the inception or start of the policy, to rebuild the property in the event of a catastrophic loss. This is the type of loss, such as fire, where the whole building needs to be reconstructed. This cost, which will ultimately be your sum insured, if you take out a policy. Needs to include the following:-

1) The cost of clearing the site, including demolition of any remaining structure.

2) The cost of rebuilidng any underground, or below ground, foundations. These are normally not destroyed in a fire, but will need replacing.

3) All architects, surveyors, legal, regulatory and professional fees in rebuilding.

This is where you need to make sure that the cost is sufficient. It is not correct to base the rebuilding cost purely on the purchase price or the market value.

The best way is to get a professional valuation, by an approved building valuation surveyor. Althought there is a cost involved, at least you have a yardstick to base your policy on. If there are any problems regarding the sum insured, you will then have comeback on the surveyor.

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Flat roofs – the information the commercial insurance companies want to know.

Thursday, July 7th, 2011

As part of our business insurance broking role, we have to go through a fact finding process. This usually takes the form of a conversation with a customer. We do not like to use pre-printed forms because one minute you could be speaking to a publican, the next an aerobics instructor and after that a UK citizen, living in Australia, trying to sort out cover on the propery that they let out in the UK (and yes, these are real and we managed to get all three quotes converted to policies).

Speaking to the last customer, the property owner, I asked what materials the roof was constructed of. To which he replied, I do not know I have never been in the roof. We did manage to ascertain though that it was a pitched, slate roof. This is what the insurers like, pitched roofs are of course designed to make water drip off, rather than go through and slates, like tiles, have a very long life span, if installed and maintained correctly.

But, when a customer says that they have a flat roof, we have to go into a different mode of questioning, which is why we need the questions in our heads, rather than on the paper, otherwise we would need a very big piece of paper. But what exactly do the insurers need to know and why? For commercial property owners insurance, one of the bigger causes of loss is water ingress from storm. If a roof is manufactrued of anything that is not as substantial as slate, tiles or metal then there is more chance of water getting in and causing damage.

Insurers will need to kow the exact material, the age, when it was last replaced (most felt roofs only last 10-15 years) and whether it is maintained either annully or bi-annually. Insurers then use this information to decide whether to load the premium and/or apply additional terms.

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Commercial building insurance – is the market turning

Sunday, April 3rd, 2011

Every commercial insurance company in the UK has their own “preferred” types of business that they want to underwrite. Some will balk at the higher risks (such as oil rigs, airports etc) whereas others specialise in this area. It is a case of, whatever floats your boat.

If the insurers know, from experience, that they can make money from a particular type of risk (say, fish and chip shops) then they will do three things. Firstly, they will design specific products to suit the industry. Secondly, they will market these products and thirdly, they will price accordingly.

I have done a few different marketing exams in the past as part of my professional qualifications. You can tell that they are not written by people in the real world, because they say that targeting niche areas is the key. This is absolute tosh. In 2011, there is very little marketing that anyone can do, that cannot be immediately replicated by A N Other.

This is where commercial property insurance comes into play. You cannot get yourself a niche product, because everyone wants a piece of the action. All insurers want commercial property business, because, over the years it makes them money. There is enough of it about that they can get in some significant premiums to cover the losses. As a result, they price to get the business, which means cheap.

Over the past few years though, they have been going beyond the profitability line. We have seen two harsh winters, this means lots of burst pipes, collapsed gutters and other cold induced damage to property. So they are not making as much as they thought, and are losing out. How do they rectify this? By increasing prices. If you find that you have a commercial or business property insurance renewal that has gone up a bit too much, give us a call to see what we can do for you.

Posted in business building insurance, business buildings insurance, business insurance broker, commercial building insurance, commercial buildings insurance, commercial property insurance, commercial property insurance quote, commercial property owners insurance | Comments Off

Restaurant insurance, with and without buildings

Monday, February 7th, 2011

If you are looking for a restaurant insurance quote, including buildings, you may want to go one step further and get yourself two different quotes.

There are some insurers that offer very competitive prices for restaurant policies, but as soon as you add the buildings, the price shoots through the roof. So, the option you have is to get one policy for the restaurant and then a separate one for the commercial building insurance. There is absolutely nothing wrong with doing it this way, contrary to what some brokers may tell you.

Some will say that you should always put the insurance covers with the one insurer. But why would you do this if the cost is prohibitive? If it is cheaper, and you are not losing out on cover, to have one policy with insurer a and the other with insurer b, then why not do this?

If the broker you get these two quotes from had any qualms whatsoever about the rights and wrongs of doing this, then they would not consider it because we have to, at all times, offer you the best product.

You may decide to put the buildings insurance in a limited company or individuals name and then the restaurant insurance in a different name. This happens a lost when people have pensions that own buildings which are then rented to their own business. Unless there are common directors, you cannot (usually) insure different limited companies on the same policy. So, if the building is owned by a different company (although associated) to the restaurant, you need to speak to someone like businessinsure as we understand the different ways that cover can be arranged.

We do not like to say we can guarantee to beat anyone else, because there are always some very, very cheap prices out there (with very , very basic cover). What we can do is offer a very good service with prices that in 80% of cases are better than you would get elsewhere.

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Insuring a commercial building you do not own.

Saturday, January 29th, 2011

One of the first things you learn when you embark on a career in the business insurance world is insurable interest. You should not be able to insure anything which does not belong to you, or you do not have a financial in. The scenario we use is that you do not insure your next door neighbours car or house. If it is stolen or damaged by a fire, even if you took out a policy on it, the insurers would of course ask you to prove ownership.

But, there are circumstances where you can, if you wish, insure something that does not belong to you. In business, this is likely to happen in two main situations. If you are leasing or renting equipment (say a photocopier) then the leasing company want you to insure it, if it is destroyed in a fire, then they want to be able to get their money back.

The other one is where you, the tenant, are asked to arrange a commercial building insurance policy for the property you are leasing. In over 90% of cases in England and Wales, anyone that leases a property, say a shop, will pay the landlord and amount, either annually or monthly, for the cover on the bricks and mortar. Unfortunately for some, the landlord does not always choose the most competitive policy, but your lease stipulates that you must pay it.

The other situation is where you have a full insuring and repairing lease. You need to arrange a commercial property insurance policy in your name but have the financial interest of the landlord noted on the policy. What this means is that if there is a fire, the landlord receives the settlement and crucially, if you decide to cancel the cover, the insurers will notify the financially interested party of this.

If you need to get a range of quotes for your insuring lease, give us a call today. We can even include cover for loss of rental income payable.

Posted in business buildings insurance, commercial building insurance, commercial buildings insurance | No Comments »

Unoccupied commercial building insurance

Friday, January 21st, 2011

If you are looking for commercial building insurance, for an unoccupied property, you may be in for a bit of a shock when you see the prices being quoted.

The prices quoted depend a great deal on the previous use of the property, how long it has been empty, whether the property is boarded up, the location and what your plans are for the property.

Whilst times are tough out there, there are still people who are looking to get a bargain, buying empty commercial properties and changing the use to residential (in the main). But, local authorities are unfortunately as pedantic as ever and whether you think the property would be ideal as flats or not, they may decide differently.

There are many, many empty public houses up and down the land, in prime residential areas. Unlike an empty high street shop, the pub is more suited to being converted to residential use, because it is already in a non-commercial area.

The problem you may face is that the time from purchase, to getting planning permission and then starting the work, can be not just months, but years. If you have a mortgage or finance on the property, then you will need to consider carefully the requirements of that loan and whether or not you need to insure the building. The last thing you want to do is to have a £250,000 mortgage hanging around your neck for a building that is just a pile of rubble!

To get a competitive quote, you need a business insurance broker to look into this for you. They can search the market for you and find the best price, sometimes for wider cover than the standard fire, lightning, aircraft and explosion.

As a very rough guide, you are looking at a rate of around 0.25% applied to the rebuilding cost for residential buildings, this can increase to 0.45% depending on which type of commercial property. But, remember to ask what the cancellation terms are. No-one wants to pay thousands of pounds for a policy, to cancel this in a few months if you get a buyer to find you get a nil return.

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