Business insurance' is a general
term that covers the different
types of insurance policies that
are advisable or may be a legal
requirement for your business or
enterprise.
Business insurance options
include:
Business premises insurance,
also known as commercial
buildings insurance
Business assets insurance, also
known as business contents
insurance
Public liability insurance
Employers' liability insurance
Professional indemnity insurance
Other specialist policies
The level of cover available for
each different type of policy is
subject to the individual policy
terms of each insurance
company. You should always
check the policy documents to
see what's included as standard
and what is considered an
'optional extra' i.e. available at an
additional cost.
In this part of our guide we look
at insurance for business
premises and contents.
Insuring your business premises
If you have business premises
then a business premises
insurance policy will cover your
commercial buildings against a
range of risks, for example fire,
explosion, storm damage and
flooding. Some insurance
companies offer 'all risk'
insurance which provides cover
for other damage and loss as
specified in the policy terms,
including accidental damage
cover.
What level of cover will I need?
When you take out a business
premises insurance policy you
will need to insure the premises
for the full rebuilding cost, also
known as the 'reinstatement
value', rather than the market
value. The reinstatement value is
the cost of rebuilding the
property in the event of a total
loss; your insurance company
may give you the option to add
on an additional percentage to
protect against underestimates
and index linking.
Don't be tempted to under-
insure in order to cut costs, as
should you need to claim then
you will be limited to the amount
you insured the premises for
regardless of whether the actual
loss or damage is more.
What if I am a tenant?
If you are a tenant then it may be
your landlord who is responsible
for insuring the premises, unless
the business has a shop front, in
which case the responsibility for
acquiring suitable insurance
cover will normally lie with the
tenant. If your landlord is
responsible for insuring the
premises and your lease
complies with the Code for
Leasing Business Premises in
England and Wales 2007 then the
insurance should be fair,
reasonable and represent value
for money. You have the right to
request details of any
commission received by your
landlord and the details of the
relevant insurance policies
relating to the premises.
What if I am a landlord?
If you are a landlord then there
will be a variety of policy options
available to you, including
policies for premises that are
unoccupied or let.
Insuring business assets or
equipment
Insurance for business assets or
equipment is also known as
business contents insurance. It's
designed to cover items such as
stock, machinery or equipment
and other contents.
What are my policy options?
When it comes to insuring
business assets or equipment
you will have a number of
options open to you. In terms of
cover, you'll normally have the
choice of 'replacement as new'
insurance or 'indemnity'
insurance.
Replacement as new policies are
also referred to as 'new-for-old
cover' and, if the claim is valid,
the policy will meet the full cost
of replacing items if they are
stolen or destroyed; alternatively,
the cost of repair will be met if
the items are damaged. Unlike
replacement as new policies,
'indemnity' policies deduct the
cost of wear and tear so that the
policyholder is put back in the
same state or financial position
they were in prior to the loss.
There is also the option to take
out a 'business interruption'
policy to insure against loss of
profits and increased overheads
resulting from, for example, key
pieces of equipment or
machinery being damaged or
stolen.
Working from home
If you operate your business
from your home, or work from
home on a regular basis, then
you may need a specialist
insurance policy as standard
home insurance will not provide
cover for business-related risks.
