A guide to commercial property insurance
There are so many different types of insurance policies that you’ll be presented with during your lifetime, including car insurance, home insurance, life insurance, travel insurance and more.
If you’re a business owner that operates from a building that you own, one of the most common and important types of insurance you might have to look into is commercial property insurance.
Below, we discuss the importance of commercial property insurance, who it’s for and what it covers.
What is commercial buildings insurance?
If you run a company and you own the physical building in which your business operates, such as an office, shop or warehouse, you may want to take out commercial buildings insurance to protect the actual building from which you run your business.
It helps to cover the costs of any damage caused to the property itself, such as if it was damaged by a flood, fire or a storm.
Commercial buildings insurance isn’t a legal requirement but it can be greatly advantageous for a business to have if you run your company from a building you own as it can help to save seriously hefty repair or replacement costs if the property is damaged and you have to temporarily suspend operation from it.
Do I need contents insurance for business premises?
Commercial buildings insurance is only necessary for companies who own the building in which they operate from.
If you rent the building in which your business premises are based, it is not your duty of care to take out commercial buildings insurance. Instead, it is up to the property’s owner or landlord.
If you don’t own the building but you want to ensure that your business is protected in the event of damage to the building, you can take out business contents insurance which will protect your business and the equipment, inventory or services that you use to run your business.
If you run a business from a building that you own, such as a hairdresser, beauty salon, office or shop, it can certainly be a good idea to take out commercial buildings insurance. It’s a good idea to think how detrimental it would be if the building in which you run your business was severely damaged and you had to pause operations for a while; could you bear the costs associated with replacing or repairing everything, as well as the cost of the business being closed while you fix everything? Companies that rely on a physical premise to run their operations could benefit from commercial property insurance to protect their business from damages to the building.
What is covered by a commercial building insurance policy?
Commercial building insurance policies cover different things depending on the provider you choose and how much cover you want to take out, but you can expect a typical policy to include the following as standard:
- The cost of rebuilding and/or repairing the building, plus any other associated fees if it is completely destroyed.
- Clearance costs for any debris or building material as a result of a fire or flood damage.
- Loss prevention costs will protect your business against any further or imminent damage that would result in injury if you were to visit the site.
- Tracing costs to locate damage to any external or internal cables, pipes or drains that could cause serious further damage or destruction to the property.
- Associated lands costs, such as if a fire or flood damaged anything else on your building’s land.
- It can also help with land decontamination costs if there was an accidental water or oil spill on your land.
The above covers things as set out in a business property insurance policy, but you will need to take out business contents insurance to cover things like computers, inventory, important documents and furniture.
How much does business buildings insurance cost?
The cost of a business buildings insurance policy depends on factors such as the rebuilding cost of the business building and the level of cover you want to take out.
When you take out a policy, your provider will ask you to provide details such as the estimated cost to rebuild the entire property if it is completely damaged plus associated costs such as surveying the area of the property.
Therefore, the cost of business buildings insurance is entirely dependent on an individual business’ circumstances as it depends on the market value and rebuild value of the property.
The cost of commercial property insurance will also depend on factors such as the size of your business, how many locations you want to insure (if you own more than one business location) and whether you want to include insurance for the contents of your business such as equipment and stock.
To find out how much it might cost you and your business, apply for quotes with different providers.
When should I take out commercial buildings insurance?
If you’ve decided that you want to take out an insurance policy for a commercial building that you own, you should ideally look to get a policy as soon as you have signed the contract for the purchase of the building.
Even if your business doesn’t move into the building straight away, it’s still a good idea to take out commercial property insurance right away so that you’re covered in the event that anything happens to the building from when you’ve purchased it.
After your business has moved into the building, you may wish to take out additional business insurance policies such as commercial contents insurance or employers’ liability insurance.
How to find the best commercial property insurance quotes
In order to find the best commercial property insurance for you and your business, you will simply need to find different providers who offer a policy and then get quotes from each provider to compare the best policy for your business.
Some of the best commercial property insurance providers in the UK include:
- Bionic Business Insurance