Commercial Building Insurance is designed to
cover buildings that are used for commercial purposes. There is a broad spectrum
of risks that fall in to this class such as shops; offices, factories, salons,
warehouses, surgeries, restaurants, takeaways, fish & chip shops etc. As
well as these types of business, insurance for commercial property that is used
for leisure purposes or education or religion also tends to be insured under a commercial
policy wording. Purchasers of commercial building insurance tend to fall in to
two separate groups. Firstly, you have the owner occupiers, these are people
that have bought a building and are going to use it for their own business.
These are owner occupied risks but are still classed as commercial insurance
because business is carried out at the premises. Secondly, you have landlords,
these are people that have acquired buildings and let them to commercial tenants
in return for a rental income. If you are the landlord of a commercial
building it must be made clear to the tenant where responsibility for insurance
rests. You may arrange the buildings insurance and charge the tenant the premium
but they will be responsible for insuring their own contents and equipment if
applicable.
The premiums for commercial building insurance
will depend on a variety of rating factors.
- The postcode will play a major part in governing
the premium charged. As with home insurance, insurers are able to tell from
the postcode, the buildings susceptibility to a loss from subsidence or
flooding.
- The construction the premises, what materials
have been used and what is is on the roof.
- The security at the premises, is it protected
by an intruder alarm or in the case of lock up shops etc, is it protected by
shutters or grills.
- Any other risk prevention mechanisms in usage
such as a sprinkler leakage system
- The usage of the building, premises that are
solely occupied as offices, tend to attract the lowest premiums for
office insurance. At the other end of the scale, property that is used for industrial
purposes, manufacturing or property that is used for catering such as fish
& chip shops tend to attract the highest rates.
Nowadays, the perils provided by a commercial
building insurance policy are fairly similar to those you would expect to find
under a domestic contract. Fire, Lightning, Explosion, Earthquake, Storm, Flood
etc. As mentioned above, it the commercial usage of the building that can effect
the premium and in some cases the type of contact offered. If you are a
landlord, then whatever the usage, the property will usually be insured under a
landlords commercial building insurance, these are fairly standard wordings, the
insurance company will note the occupation and charge an insurance premium accordingly.
However if you are the owner of the business and wish to insure the building,
you can usually include it under your business combined insurance policy. Your
trade will govern the type of policy you receive. If you are operating a
catering establishment such as a restaurant or a takeaway or a fish and chip
shop, then you should receive a bespoke catering insurance policy wording. If
you run a shop, then a retailers wording would be more pertinent, if it is a
factory then a commercial combined wording. Whilst the core wordings of all
these polices are the same, they each contain subtle differences. These differences
take in to account the different needs of the trade groups and you will
find each policy has been tailored to match the needs required.
When obtaining your quotation for commercial
building insurance, most people want to know how they can obtain a cheaper
quotation. Certainly, its not by lowering the sums insured, this is a very
foolhardy thing to do and you may find that if you have not insured on the
correct basis, your insurers may make deductions from you claim. There are
however a number of ways in which you can obtain discounts and still receive the
correct form of cover.
- Shopping around, despite all the advertisements,
the really only effective way of ensuring you have received a competitive
quotation is to shop around. Even with insurance brokers, they rarely cover
all of the market, someone always seems to have a commercial building
insurance scheme, or be able to obtain lower rates.
- Accept a bigger excess. Most commercial
building insurance policies will come with a compulsory excess. You can
increase the excess in return for a discount.
- Some insurance companies now offer a no
claims bonus. Even if they don't, point out that you have been trading for a
number of years without a claim and if may help to bring the premium down.
- Improving the security at the premises by
fitting an alarm or shutters may result in a cheaper premium.
If you are a landlord requesting a quotation for
commercial building insurance, it is vital that you tell the insurance company
exactly what the building is being used for. Whilst, for example, you may
have let the premises to a tenant who are going to use the building s a shop,
closer inspection may reveal that they are intending to manufacture certain s of
their goods on the premises and this can affect the premium. If there is a flat
above the premises and this is also being let out on a commercial basis, you
will need to disclose this to the insures. They may want to know the occupation
of the tenant.
If you property is used for catering, in particular
fast food catering, you will probably find that any quotation received contains
certain conditions regarding the installation and up keep of extraction
equipment. Most policies state that, cooking fume extraction equipment, canopies
ductwork and the like are washed/wiped daily and must be cleaned at least
once a year by an independent contractor. As well as this, all filter,
traps and other grease removal devices must be thoroughly cleaned at least once
a month. This is of the utmost importance, tasks are outside of your control,
anyone renting your building for commercial catering usage will have to carry
out these requirements
Another fairly typical condition is to a
building used as a fish and chip, this will usually contain a
Deep Fat Frying Warranty, It states that a chip shop must ensure
that all ranges and equipment used for the purpose of Deep Fat
Frying are to be cleaned weekly and at least once a year by an independent
contractor.
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