Commercial property comes in all shapes and forms, and, depending on the use of the property, different buildings and business insurance types may be required. Read on for our commercial property FAQs to understand what you may need …
What is commercial property?
Commercial property comes in all shapes and sizes – from a local corner shop to a multi-million pound, city centre office block.
The property may be used for manufacturing or other industrial activity, retail business, offices, not for profit organisations – everything from hair and beauty salons to petrol stations may be included under the general definition of commercial property.
Depending on the nature of the building and the business conducted within it, some property may be used for mixed residential and commercial use.
What is the annual value of the commercial property market in the UK?
According to the Wall Street Journal on the 22nd of January 2016, the value of commercial property investments in the UK reached a record £64.3 billion during 2015.
What is commercial property insurance?
Insurance for commercial property may cover a wide range of risks, but perhaps the core of any policy is the protection against loss or damage of the structure and fabric of the building itself, together with any of the owner’s contents.
Examples of the physical risks which might be covered in this way include, fire, flooding, earthquakes, explosions, escape of water, storm damage, impacts (from aircraft, vehicles or falling trees and branches), vandalism and theft.
The amount of insurance required naturally depends on the size of the commercial property and the business activities carried out within it. As a general rule, however, building and contents cover assumes the worst case scenario in which the building is a total loss and needs to be completely rebuilt.
Guidance on the calculation of rebuilding costs – for both residential and commercial property – is published by the Royal Institute of Chartered Surveyors (RICS).
Is cover suitable for those operating their own business within the property and those who have invested to let?
The simple answer is yes – commercial property insurance is suitable whether the premises are being used for your own business or let to others.
It is important that your insurer understands your intentions, however, since the assessment of risks and the policies offered differ in the event of the property being let.
What is included in commercial property insurance?
The insurance may cover a wide range of business risks, but – after protection of the building and its contents – a major element is the protection of the owner or landlord against claims arising from a public liability.
As the property owner, you owe a duty of care to take all reasonable precautions against personal injury to or damage to the property of anyone visiting your property, your customers, suppliers, members of the public and owners of neighbouring buildings.
In the event of an injury, death, or property damage you may be held liable and ordered to pay substantial compensation. The amount of public liability insurance needed is likely to vary according to the size and nature of your business – but even relatively modest enterprises typically hold indemnity against claims of at least £1 million.
What does empty commercial property cover?
This insurance is designed to cover the extra risks your property may be exposed to while it is standing empty.
From time to time, you may find that your commercial property needs to be left empty and unoccupied – previous tenants have moved out, for example, and you are awaiting a new tenancy agreement.
In that case the risks and perils to which your property is exposed take on greater proportions – from the risk of vandals, squatters and arsonists, for example, and from emergencies such as fire or flooding becoming apparent after the event because there was no one on the premises to raise the alarm.
For reasons such as this, your commercial property needs the additional protection of specialist unoccupied property insurance throughout the period during which the premises remain vacant.
How UKinsuranceNET can help
At UKinsuranceNET our aim is to not only offer cost-effective insurance protection for both occupied and unoccupied commercial premises but to help you make informed decisions with the help of our useful information and guides.