Home Commercial & Retail A guide to commercial property insurance for smaller businesses

A guide to commercial property insurance for smaller businesses

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When starting a business, insurance isn’t something you should overlook. In fact, you could easily end up in a situation where not having particular insurance for your business would be breaking the law. Nonetheless, working out what insurance to have can feel like a minefield when it is the corporate premises you are thinking about. With this article, we hope to help lift confusion.

What if you run a business from home?

This is likely to be the case if you have only recently started the business – and, in this situation, property insurance is likely to be a less serious concern than it would otherwise be. After all, the building is primarily your home, not corporate premises. Therefore, your personal household insurance might already cover everything essential to working from that home.

If you currently remain in the process of setting up your home-based business, inform your home insurance provider about your plans, the Money Advice Service recommends. Your insurer might react by seeking a further premium on top of what you already pay. You would have to pay that additional cost if you wanted to avoid the possibility of trying to make a claim only to find that your current home insurance doesn’t cover it.

What would insuring dedicated business premises entail?

Maybe your company has expanded to the extent where working from home is no longer practical and so you have started seriously considering renting special premises for the business. You might have even spotted a building that looks just right for your needs.

When seeking to rent that building, look closely at the terms of the lease. You might find that the lease would require you, not the landlord, to insure the building. This could entail both arranging the insurance and paying for it, though an alternative possibility is that the landlord arranges the insurance and requires you to pay the premiums.

There is also a third possibility highlighted by the Royal Institution of Chartered Surveyors: that, if your business will be in only part of the building, the landlord arranges insurance for the whole building while charging you just a relevant portion of the premiums.

How much should your commercial property insurance be?

You can request a chartered surveyor to assess what the property’s reinstatement costs would be. Those costs are what would be payable to put the premises back together if they were entirely lost as a practical base for your business. So, factored into those costs would be demolishing and clearing the site, not to mention professional and local authority fees that would be applicable.

Nonetheless, calculations should also take account of how construction costs could, over time, rise due to inflation. You should also make sure that your insurance covers the costs of continuing to run your business in the event that the premises are so seriously damaged they can no longer be used.

How to time-effectively arrange commercial property insurance

If you are the party tasked with arranging the insurance for the commercial property, you can do so in a streamlined fashion by getting in touch with an insurance broker. You could choose one that focuses strictly on corporate insurance; Be Wiser Business Insurance is such a broker.

If you chose Be Wiser Business Insurance, you could use this Hampshire-based broker’s website to request an online quote. The broker will then turn to a range of major insurers as it looks for policies that would satisfy your precise requirements. From what policies it gathers, it will select one that represents the best value for money. The broker will offer this policy as a quote.

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