It is very important as a property owner whether small or commercial property to have property insurance.
property insurance is a form of insurance that protects the property owned by your business your building, equipment, store fixtures, and more.
It pays to replace or restore stolen items and items damaged or destroyed by fires, windstorms, and other events.
Property insurance is insurance for the items your business owns.
If a covered event damages or destroys them, your policy will pay to repair or replace the affected items.
Property Insurance UK
Property insurance in UK could be buildings or contents or personal possessions or could also relate to commercial building insurance. However, most people mean the insurance of home buildings and contents and personal possessions.
Literally the word “property” designates those things that are commonly recognized as being the possessions of a person or group.
Important types of property include buildings, whether they be private dwelling houses or commercial property,
personal property such as the contents of a dwelling house, business contents associated with a business or trade.
or other personal possessions such as watches or jewellery. Property insurance UK can also relate to slightly less tangible objects such as intellectual property rights over creations, inventions and discoveries etc.
However statistics show that the vast majority of peoples interpretation of the term property insurance UK, relates to the insurance of private dwelling insurance either the building or contents or both.
Private property insurance in the UK is a very easy type of policy to place, the bulk of homeowners use their private dwelling houses for nothing other than a place to live and
Thus there are a seemingly endless number of providers willing to provide insurance quotations, either online or on the telephone or as was traditionally done, face to face in a broker or intermediaries office.
If you property, is used for any kind of business use (other than clerical), you may find it a little harder but certainly not impossible.
There are a growing band of homeowners that have decided to work from home and often an office can be found at the property.
If you work from your home and require to insure the buildings and contents , most of the online comparison websites will be unable to help you and you have have to phone around for quotations.
In the quote terms and conditions on many of these sites, it states that it is assumed that the property is used for domestic purposes only.
A property insurance policy with a fairly similar wording will be supplied.
Property insurance covers the following damages
Acts of vandalism
Commercial property insurance protects a building owned by your business against fire, vandalism, and other types of damage.
Example: A fire starts in an adjacent building and spreads to your IT consulting office. Property insurance helps pay for the office’s renovation after the fire.
Furniture and fixtures
The furniture and fixtures inside your owned or rented building are protected by commercial property insurance.
Example: Someone breaks into your restaurant and vandalizes the dining area, breaking chairs and causing widespread damage. Your commercial property insurance helps pay to repair broken items and replace destroyed furniture.
Supplies and equipment
If your business’s supplies or equipment are damaged, lost, or stolen, commercial property insurance coverage can help repair or replace the items.
Example: A thief breaks into your computer repair business and steals thousands of dollars in computers and electronics. Property insurance pays for replacement of the stolen items.
Commercial property insurance protects the inventory of retailers and other stores.
Property insurance does not pay for losses such as:
Property insurance does not cover:
Inland marine insurance protects business property in transit or equipment that moves to different worksites.
It often covers your business property no matter where you take it.
Example: A lawn care company brings its landscaping tools and equipment to its clients’ homes and offices.
Because the items are in transit, they’re exposed to more risk, necessitating inland marine coverage instead of standard property insurance.
Damaged customer property
General liability insurance is the policy that covers property belonging to your customers and clients.
Example: A door installation company accidentally breaks a customer’s window when carrying a door through a home.
General liability insurance helps pay to replace the window.
It could also cover legal costs if the customer sued over the damage.
Business interruption costs
Business interruption insurance can cover costs when a disaster forces a business to close temporarily.
It can pay for lost revenue, day-to-day expenses, and the cost of moving to a temporary location.
Example: A fire at a tax preparation company causes the business to close for a week.
Property insurance covers the cost of renovation, while business interruption insurance helps cover normal operating expenses during the closure.
Janitorial bonds reimburse your clients if an employee steals items or money from them.
They are a type of fidelity bond, which protects your business and its clients against dishonest employees.
Example: An employee at your house cleaning business steals jewelry from a client’s home.
The cleaning company has a janitorial bond, so its insurance company reimburses the client when the theft is discovered.
Equipment breakdown coverage pays to replace malfunctioning equipment after a mechanical or electrical failure.
You can add this extra coverage as an endorsement on your commercial property insurance policy.
Example: The ice cream machine at a fast food restaurant breaks down. Because the restaurant has equipment breakdown coverage, its property insurance pays for the repair.
Destroyed payment records
If a burst pipe or other incident destroys customer records, your business could have trouble collecting outstanding customer payments.
Commercial property insurance doesn’t cover the extra cost of recovering these payments unless your policy has an accounts receivable endorsement.
Example: A fire at a landscaping business destroys customer payment records.
To find out who owes what, the business hires a temporary accounting professional paid for by the accounts receivable endorsement on its property policy.
Commercial property exclusions
Commercial property insurance has some coverage exclusions.
For example, it usually doesn’t pay for property damage caused by natural disasters like earthquakes, hurricanes, tornadoes, and floods.
If you need coverage for these events, you can add an endorsement to your policy.
It also doesn’t cover damage caused by short circuits, power surges, or loss of pressure. An equipment breakdown endorsement extends coverage to damage caused by these event
Property insurance is widely available in the insurance marketplace. However, insurers won’t provide coverage to every small business.
First, a business must prove to the insurer that it is a professional and financially responsible firm.
A business can do this by fulfilling the insurer’s underwriting requirements, which are a combination of facts about the business and information about the company’s prior history of filing property damage insurance claims.
Companies that are viewed as inherently risky or that have a track record of suffering frequent property losses may not be able to qualify for coverage, or they may have to pay extra for it.
Understanding Property Insurance
There are three types of property insurance coverage: replacement cost, actual cash value, and extended replacement costs.
- Replacement cost covers the cost of repairing or replacing property at the same or equal value. The coverage is based on replacement cost values rather than the cash value of items.
- Actual cash value coverage pays the owner or renter the replacement cost minus depreciation. If the destroyed item is 10 years old, you get the value of a 10-year-old item, not a new one.
- Extended replacement costs will pay more than the coverage limit if the costs for construction have gone up; however, this usually won’t exceed 25% of the limit.
When you buy insurance, the limit is the maximum amount of benefit the insurance company will pay for a given situation or occurrence.