In business – understanding insurance

When running a business, it’s likely that you will never need to claim for fire or burglar damage. So, it may seem a little unnecessary to acquire that insurance. However, consider that these risks have the potential to entirely wipe out a business that has taken years to build up. It’s quite clear that being properly insured is worth it when you consider just how devastating damage to your property could be.

Take a look at our “Fire and Extended Perils” policy page for more information.

A typical commercial fire policy will have three sections.

• Coverage of the building or structure
  • It is recommended that the policy be written to include the full replacement cost, including debris removal and professional fees, ideally specifying separate sums insured for each of these items, so both your insurer and you know they are there and allowed for. And it would be wise to consult a qualified surveyor rather than risk getting your sums wrong.

• Coverage of your stock
  • This should be valued at your purchase price (plus freight and duty) without any addition to cover your projected profit. If a loss occurs the claim will have to be substantiated, so full records of purchases and sales must be kept.

• Coverage of fixtures and fittings not included in section one, plus plant and business equipment not covered under section two.

A typical commercial theft policy covers loss of articles resulting from theft involving forcible entry, and may include the cost of repairing damages to the premises.

Losses from walk-in thefts or shop lifting would not be covered, and glass damage must be covered under a separate glass policy. Money is also excluded from a Theft policy and should be covered under a specialised money policy.

Other types of policies to consider would cover such things as your liability to your customers or employees to recover losses resulting from an injury suffered on your premises.