Commercial Property Insurance

According to some of the latest research (IPF Research Programme, published March 2014) the UK’s commercial property market is worth nearly £650 billion – 45% of that in retail premises (including restaurants and pubs), 28% in offices, 18% in industrial premises and 9% in other types of commercial property.

In other words, such ownership represents an immense sector of the UK property market and one that requires commercial property insurance of the smallest to the largest types of property.

What is commercial property insurance?

What is commercial property insurance?

The Association of British Insurers (ABI) explains that commercial property insurance typically provides protection:

  • the cost of repairing or completing rebuilding your commercial premises in the event of damage or total loss;
  • the loss of equipment or stock contained in the commercial property; and
  • (usually optionally), compensation for loss of revenue caused by the disruption to your business in the event of an insured incident.

What does it typically cover?

What does it typically cover?

The definition may become clearer by taking a look at what the insurance typically covers – although the precise terms of cover may of course vary from one property to another and from one insurer to another:

Building insurance

  • cover against potentially major risks to the structure and fabric of the building from events such as fire, flooding, impacts, storm damage and vandalism;
  • since perils such as these may result in the need for the complete reconstruction of the premises, this element of commercial property insurance typically covers the cost of rebuilding the premises from scratch – the actual cost of rebuilding, in other words, and not the purchase or current market price of the property;

Contents insurance

  • cover against loss or damage of the contents of the property – in general terms, any contents you may own, including equipment, machinery, work in progress and stock;

Public liability insurance

  • indemnity against claims from members of the public, customers, suppliers or members of the public who may be injured or suffer damage to their property in connection with your ownership of the property is also important;
  • protection for anyone employed by your business, however, needs to be met by your legal obligation for providing employer’s liability insurance (of a minimum of £5 million;

Business disruption

  • in the event of an insured incident closing down or severely limiting the normal operation of your business in the insured premises, commercial property insurance may optionally cover loss of revenue and any additional costs in running the business.

Who is commercial property insurance suitable for?

Who is commercial property insurance suitable for?

Given the broad range of risks and perils typically covered by this type of insurance, it may be clear that it provides a valuable safeguard for the owner of any type of commercial premises.

Along with the broad categories of retail, industrial and office accommodation, commercial property insurance is also suitable for the owners of restaurants, pubs, hotels, leisure facilities, petrol stations and car parks.

To arrange cover for your particular premises and the type of business you are running, you might want to consult a specialist provider of commercial property insurance, such as us here at Specialist 4 Property Insurance.

Summary

Summary

Commercial property insurance provides valuable protection for property owners, covering not only the structure and fabric of the premises and their contents, but also risks such as public liability and the disruption of business activity in the event of an insured incident.

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