If adversity strikes, lack of sufficient commercial property insurance could make or break your business. It is vitally important that commercial property owners have the right insurance to cover for loss or damage. The right insurance will get the business up and running as quickly as possible.
It is vital that business owners carefully check the coverage and exclusions to ensure that it will adequately cover any costs. The following items should be covered by commercial property insurance:
Building Replacement Value
Commercial insurance needs to go beyond covering just for the structure of the premises and will have to include such things as fixtures and fittings, air-conditioning and so on. It would be prudent to employ the services of a professional property evaluator to get a realistic estimate of the costs involved.
Trade and Access Extension
As an example, a common cause of damage in a block of flats is leaking pipes. This will only usually be covered, though, if it has been established that the cause is accidental. It could cost up to lb15,000 to establish the cause.
Squatter's Rights
A controversial change in legislation back in September 2012 means that it is now illegal to squat in residential premises. But this law does not apply to commercial premises, making them an obvious alternative for people living in that situation. Therefore, if the premises do become empty for an extended period, not only should the premises be made as secure as possible, but it is also important that insurers know, so that appropriate cover is in place for this circumstance.
Inflation Provision
When things go wrong after loss or damage, then repair work can cost more than anticipated when unexpected issues arise. It is vital, therefore, to allow for this by inflating the cost of the sum covered by the insurance by 50% thus protecting yourself from under insurance.
Acts of Terrorism
In areas outside big cities, the threat is minimal, which is reflected by the modest cost of the extension. But it is worth bearing in mind, that should an act of terror occur, unlikely though it is, the owner is likely to be responsible.
Rental Insurance
Anyone with a commercial property will have to consider whether the premises will be leased out at any point. If it is, then the nature of the tenant's business must be taken into consideration. Any high risk businesses will increase the premium. The owner will also have to take into consideration loss of rental income while the premises is undergoing repair.
Loss Adjustor's Fees
A loss adjustor's expertise could prove very helpful after theft or damage and could speed up any repair work to the premises, particularly if the claim exceeds lb5,000. They may also prove helpful in finding suitable alternative premises in the meantime.
Business Interruption Insurance
During an upheaval caused by damage to premises, business is bound to be interrupted. Business interruption insurance will ensure you are covered for any loss in pre-tax profits incurred while the premises is being repaired and may help with any additional costs.
Clearly, commercial property insurance is essential to any commercial property owner in the event of unforeseen circumstances and for continuation of business.
It is vital that business owners carefully check the coverage and exclusions to ensure that it will adequately cover any costs. The following items should be covered by commercial property insurance:
Building Replacement Value
Commercial insurance needs to go beyond covering just for the structure of the premises and will have to include such things as fixtures and fittings, air-conditioning and so on. It would be prudent to employ the services of a professional property evaluator to get a realistic estimate of the costs involved.
Trade and Access Extension
As an example, a common cause of damage in a block of flats is leaking pipes. This will only usually be covered, though, if it has been established that the cause is accidental. It could cost up to lb15,000 to establish the cause.
Squatter's Rights
A controversial change in legislation back in September 2012 means that it is now illegal to squat in residential premises. But this law does not apply to commercial premises, making them an obvious alternative for people living in that situation. Therefore, if the premises do become empty for an extended period, not only should the premises be made as secure as possible, but it is also important that insurers know, so that appropriate cover is in place for this circumstance.
Inflation Provision
When things go wrong after loss or damage, then repair work can cost more than anticipated when unexpected issues arise. It is vital, therefore, to allow for this by inflating the cost of the sum covered by the insurance by 50% thus protecting yourself from under insurance.
Acts of Terrorism
In areas outside big cities, the threat is minimal, which is reflected by the modest cost of the extension. But it is worth bearing in mind, that should an act of terror occur, unlikely though it is, the owner is likely to be responsible.
Rental Insurance
Anyone with a commercial property will have to consider whether the premises will be leased out at any point. If it is, then the nature of the tenant's business must be taken into consideration. Any high risk businesses will increase the premium. The owner will also have to take into consideration loss of rental income while the premises is undergoing repair.
Loss Adjustor's Fees
A loss adjustor's expertise could prove very helpful after theft or damage and could speed up any repair work to the premises, particularly if the claim exceeds lb5,000. They may also prove helpful in finding suitable alternative premises in the meantime.
Business Interruption Insurance
During an upheaval caused by damage to premises, business is bound to be interrupted. Business interruption insurance will ensure you are covered for any loss in pre-tax profits incurred while the premises is being repaired and may help with any additional costs.
Clearly, commercial property insurance is essential to any commercial property owner in the event of unforeseen circumstances and for continuation of business.
About the Author:
Read more about investing in commercial property on the Addicted to Property blog. It will keep you up to date with all the latest industry news.
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