Business property insurance

Landlord's cover for business premises

Business property insurance, also commonly known as property and building insurance, protects your building and its contents against risks like fire, weather, theft and natural disasters. Any business in the UK or around the world is a major investment and the structure itself is often the most expensive part. A fire or storm damage can easily shut down operations for extended periods while repairs are being made, adding to the costs of the damage to the structure.

Theft, vandalism and maliciousness are very common in the business world and can add up to serious losses and downtime, and nothing is more damaging than a deliberate attack from someone who knows your operations from the inside. These are just a few of the more common situations that arise, many more can spring up at any moment and leave you in a financial or legal crisis. This is exactly why you need property and building coverage, when these situations happen you will have the finances to salvage what you can and immediately begin the process of getting your business up and running again. With some careful planning, you may even avoid business interruptions altogether.

There are two basic types of business property insurance covering risks known as perils. There are policies that are peril specific, commonly known as named perils, that cover very specific causes of loss and only those causes. The other type is called an open peril, or multiple peril, that covers all loss over a range of causes, typically excluding things like terrorism and earthquakes. The type of coverage you need depends on the manner of business your are performing, the particular geography and even the weather trends for what area of the UK you are operating in. Many times both types of coverage are used in combination to provide the maximum protection. For instance, if your operations are in an area particularly known for severe flooding, you can supplement your open peril protection with flood coverage. Another great example is when items of much higher value and risk are present, a separate policy is almost always required and a specific peril policy is a perfect solution.

Fire cover can actually be used in both capacities, included in an open peril policy as well as additional protection. Fire cover also has facets of its own ranging from the actual cash value of contents inside your structure to the costs of repairing the structure itself. Fire protection for business comes in three main varieties known as replacement cost, actual cash value and extended replacement. Replacement cost is a policy that pays the replacement costs as if new without consideration for depreciation or appreciation. Actual cash value protection only pays the cost of replacement minus the depreciation value, and extended replacement will pay costs over the coverage limit if costs of services like construction increase. In most cases, the insurer will only cover up to twenty percent over the original pay out, but it is very helpful when trying to recover from something as devastating as fire.

When the insurance policy is taken out the pay outs and terms are established. This is also the time to go over exactly what is covered and how like the building and contents, account information, inventory, furniture, machinery and even money. You can often improve your level of coverage and reduce costs by taking steps to prevent loss and damage like installing fire suppression systems, security systems and anti-theft devices.

When evaluating you business insurance needs you should also consider specific business interruption and what is known as extra expense insurance. Business interruption is just as the name implies, covering things like salaries, taxes and debts while recovering. The extra expense coverage is to cover costs associated with relocation if you need to operate out of a temporary location for a time, as well as purchasing new equipment and merchandise. In the chaotic times after any damage or loss to your business you will have enough problems do deal with, and having insufficient protection or the wrong types of protection can turn the smallest damage or loss into a disaster.