commercial property insurance quote

Archive for the ‘commercial property insurance quote’ Category

Commercial building insurance and property owners liability

Monday, January 9th, 2012

Public liability insurance falls under, or is part of, the law of tort. Put simply, this focuses on civil wrongs, contrasted to criminal wrongs. If someone is injured, or property is damaged, as a result of your business or property owning activities, you could be held liable.

You may have read in the press about postal workers suing homeowners for slipping or tripping or people suing a building owner when a tile hit their car. These are examples of claims that would fall under property owners liability. Although the claim is directed at the property owner, if they have a commercial property owners insurance policy, then the insurer foots the bill. However, in law the claim needs to go against the individual property owner.

As an owner or occupier you do have a duty of care to anyone that enters or arrives on your property, but there are limitations. In a way this is where the insurers are fighting back. With the advent of no win, no fee legislation, it was very easy for anyone to approach a solicitor and go through the formal claims process at very little cost.

Perversely, some of the business insurance companies set up schemes, offering customers legal expenses to pursue actions, including against their own company. For a few hundred pounds you could buy a policy and make a claim for a few thousand. The solicitors took their ever increasing cut of up to 50%. But, if you tripped on a loose pavement slab or a bit of carpet in a shop you could get yourself around £1,000.

But, the insurers have started to question these claims a bit more. It used to be that it was cheaper to just pay the few thousand than fight the case. Everyone knew this, but as the number of claims spiralled, almost out of control, the insurers started to think that they could, overall save a bit of money.

If you are a property owner and have a buildings policy, you should automatically get cover for property owners liability built in to the policy, if not, have a word with your broker and get this added asap.

Posted in commercial property insurance, commercial property insurance quote, commercial property owners insurance | Comments Off

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

Property owners insurance – full knowledge of the construction materials

Thursday, December 8th, 2011

With all the emphasis given to the Financial Services Authority and the pressure on business insurance brokers to act professionally and treat customers fairly, we are still amazed at how many businesses approach us for quotations without full details of the insurance they require.

As the owner of the property, it is their responsibility to provide us with a current rebuild cost for the property, as opposed to basing the quote on last years renewal premium and sums insured when looking for a property owners insurance quote. You would think, but it is not always the case, that a property owner would know the age of the property and also the type of the construction of the walls, floors and roofs.

A commercial insurance company, when providing a quote, will need to know if there is any element of flat concrete or flat felt on timber roof. Where there are flat roofs, terms and conditions will apply to claims and/or losses relating to the roof. These include annual inspection clauses and repairs and many will exclude storm or water damage arising from flat roofs, don’t get caught out. When you approach us for a property or business insurance quote with buildings, we will need to know if there is any element of flat roof. Even if this is just 10% of the overall roof area. We will always aim to obtain a range of property owners quotations to ensure the best terms are found for our clients.

Another point that insurers will need to be fully aware of is whether there are any composite panels in the building. This usually only applies to food processing and cold storage plant. However, modern buildings are now more likely to include pre-formed panels with insulation built in to try and reduce the heating costs. You need to know what the material is, whether polystyrene, Rockwool or similar or some other material. Every insurance policy is based on the principle of utmost good faith, you must declare the full facts of the risk to insurers. If you fail to declare composite panelling, which can represent a higher risk of fire, then your insurance policy may not pay out in the event of a claim for fire.

You should always speak to an independent business insurance broker who will go through steps to gain the required information from you, to present to a range of insurers to get you the best terms at the best price.

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

Loss of rental income – what’s the indemnity period all about?

Friday, November 25th, 2011

On a commercial property owners insurance policy, the main cover taken out is for the actual building. This is the actual structure or the bricks and mortar. You cannot take out a policy without this. The cover you get is what they call “standard perils”, which is fire, storm, flood, burst pipes and a few others. This cover can be extended to include accidental damage and subsidence, heave and landslip. We always quote to include these covers as a minimum.

In addition you can get property owners liability and glass cover. The reason being that insurers always cover the glass separately. Then you can get loss of rental income. If you own the building and rent it out, if there is a fire (for example) and your tenant moves out, you lose out on your rent. This is where you get loss of rental income, but only from an insured peril. What this means is, if a tenant defaults on their rent, you are not covered, but if it is unable to be let for 9 or 10 months while work is done, you get the rent.

The question is, how long do you take the rent cover for? This is what the indemnity period is. All standard policies, that have loss of rent, will have the cover for 12 months. What you need to do though is consider what would happen, in the event of a disastrous fire? Could your whole property be rebuilt to a standard so it could be let again within 12 months? The chances are, no, and this is why you may need to speak to your business insurance broker about getting cover for an extended period. It really adds very little to the premium to go from 12 to 36 months. You can get cover for 18, 24 and even 48 months from most insurers. This is, again, where the beauty of dealing with a broker shines through.

There are plenty of websites that offer, and we use the term as loosely as possible, to compare business insurance. If you do not tick the box to add loss of rent, there is no-one there to question this and explain the benefits of this cover.

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

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.

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

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.

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

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

Business insurance – what does average mean?

Saturday, October 23rd, 2010

If you have a business insurance policy, or you have just received a quote, you may be told by the broker that “average” applies to the cover.

You may well wonder what average means and how this affects the insurance. Your policy may contain a clause that is called something along the lines of Reinstatement Basis or Reinstatement Condition. It is one of the standard general definitions of a policy and applies to the vast majority of commercial insurance products. It is more commonly called average and it is extremely important.

An insurer wants to receive the correct premium for the risk they are facing. A 17 year old, male, living in an inner city with a sporty car is going to pay more than a middle aged family man in the country. So, if the 17 year old lies and says he is 47, he will not only get a cheaper premium but he will also have any claims he makes turned down as h has misrepresented the risk to insurers. They do not, and cannot, check on the validity of the information provided at quote stage. This is why you complete a proposal form or accept a statement of fact and this forms the basis of the policy. ie, if you lie the the policy is invalid.

Now think to a commercial policy. If you have a stock holding of £50,000 and you only declare £25,000 to the insurers, you will be underpaying that element of the cover by, say 30-50%. If there is then a loss the insurers will apply the average clause. You under-insured by 50%, so any claims settlement, whatever the amount, is reduced accordingly. So, if a flood destroyed £10,000 of your stock, the insurers would only pay 50%.

The same applies to buildings, with commercial building insurance, you need to declare a re-building or reinstatement cost for the property. If you mis-represent this amount to insurers then any claim will also be reduced.

For example, if your 1,000 square foot warehouse is £200 per square foot to rebuild, you should insure for £200,000 plus 20% for additional fees, costs and a contingency, ie £240,000. If you insured for less than the correct figure, you could face a reduced payment.

The secret is, to get a proper commercial valuation of the rebuilding cost, every 3-5 years. It may cost £2-300, but it reallyis worth it because you are safe in the knowledge that if the figure is wrong you have not only done all you can, you have also got the potential of suing the valuer.

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

Commercial building insurance – frost cover

Tuesday, September 21st, 2010

Any business insurance policy, whatever type of trade it covers, will include certain exclusions, warranties, conditions and excesses. There are reasons for these being included. The more cynical will think this is the insurers trying not to provide cover. The more realistic view is that these need to be included because without them, the insurance companies would simply have to pay out for anything and everything. This would then lead to increased costs in premiums. As the amount of claims increases so would the premiums and this spiral would continue until it became unaffordable to arrange cover.

One of the standard exclusions is for frost damage. Last winter we saw unprecedented levels of storm and burst pipes claims. As far as frost is concerned, the actual damage caused by the frost, ie to brick work, is excluded. Whereas, the consequent damage, ie water seeping in, is covered.

The reason that frost is excluded is because it is a maintenance issue. A normal wind and watertoght building, in good condition, should not allow water to sepp into brick work and then for this to freeze, expand and cause damage.

It (frost damage) really only occurs under commercial building insurance polices. Certain insurers will allow restricted cover, maybe with a limited payment of a few thousand pounds. The reason that frost is excluded, is because your policy is not a maintenance contract. A building should not be allowed to get into such a condition that water can seep into the brick/cement work. If that is the case, then the building should be re-pointed or the bricks replaced or coated with a waterproof membrane (in the summer months!)

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

Unoccupied building insurance – is this a business policy?

Thursday, September 16th, 2010

We received a call from an existing customer who is renovating a house and living in a mobile home on-site. Their home insurers are refusing to extend cover as the property is, under their definitions, unoccupied. They have advised the customer to get a business insurance policy.

The question from the customer is, why is this a business policy? You would think, that a business policy would be only one available to live, trading businesses. However, nothing is of course that easy.

You can get business policies for charities, non-trading companies, dormant companies and of course, residential and commercial property insurance. So, the unoccupied property, that is not a business, is not earning income, is probably a complete drain on resources, is not one that a traditional house insurer will cover.

What you need to do, is to speak to a business insurance broker. They will have access to a huge range of property owners policies, many of which will cover unoccupied, vacant or untenanted properties. It does not matter whether these are residential or commercial, they will be able to get the right policy for you. The only difference, that will affect the premium and cover considerably, is whether there is just general “tidying up” renovation, ie painting, decorating, new kitchen/bathroom etc, or whether you are being more ambitious and structural changes are undertaken. This would include new windows, extensions, conversions and new roofs.

This is when the insurers may restrict the cover to simply, fire, lightning, aircraft and explosion. If you are not doing structural work, you can get cover for storm, burst pipes and/or theft and malicious damage.

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