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What does commercial building insurance cover?

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If you own or are buying a commercial property then commercial building insurance will protect you from paying for damage or repairs caused by different incidents. These can range from events such as damage caused by weather systems to malicious or intentional damage. 

Whether a building is occupied or unoccupied having a commercial building insurance policy in place will shield the landlord or building owner from costly expenses. According to NimbleFins, commercial building insurance policies for unoccupied buildings usually have a higher premium. This is because damage-causing events such as water leaks may go undiscovered for some time, causing even further problems to the building and its structure.

For commercial property having the correct insurance in place will not only protect landlords from paying costly repairs but will also cover a portion of legal expenses associated with claims. Claims can arise from naturally occurring, or man-made events that can require extensive building works like:

  • Fires
  • Floods
  • Storm damage
  • Lightning strikes
  • Malicious damage
  • Vandalism

What is not included under the policy are things like normal wear and tear or age-related issues such as rusting, stains, or peeling paintwork. Commercial building insurance protection can extend beyond the building and includes the surrounding premises. Fences, gates, and car parks can count as part of the property and be included as part of the insurance policy.

Does commercial buildings insurance cover structural issues?

Having a commercial building insurance policy means that the cost of some types of damage to the property is included. Damage or loss caused by events like flooding or storms will be commonly covered under most policies. And heave and subsidence, which can cause structural issues, might also be covered. But settlement and slow-to-develop structural issues may not. Coverage will vary from one policy to the next.

Where an event is covered, costs of repair, replacement, and rebuilding include the internal structure and systems of the building. Things like pipes, drains, cabling or electrical systems will all be covered. Any damage sustained to external structures like sheds or garages that are part of the property can also be protected by a commercial buildings insurance policy.

The protection provided by commercial building insurance does not extend to issues caused by poor workmanship or mistakes. Damage claims that are paid for the building are only for the incidents listed on the policy. Structural issues that are the result of using poor material or incorrect installation will not be covered by a building insurance policy.

Does buildings insurance cover a broken door on commercial property?

If a door on the property has been broken or damaged by a weather-related incident or has been destroyed due to vandalism then the cost of repairing or replacing the door should be covered by a commercial property insurance policy. Locks are also covered as part of most policies, if a break-in has damaged or broken the door lock the cost of replacement will be covered by the insurance.

However, a door broken due to wear and tear or poor workmanship would not be covered on a commercial property insurance policy.

As numerous incidents can cause damage to a building that will need repairs, landlords and owner-occupiers purchase commercial building insurance to protect from ongoing costs associated with owning property. As repairs or damages can run into thousands of pounds, having adequate insurance can relieve some of the financial responsibility.

Along with the building, its infrastructure, and internal systems, other fixtures like doors, walls, sheds, garages, fences, or anything else that comprises the building will be included in the building insurance. 

Do landlords have to buy commercial buildings insurance?

With the lengthy list of things that can go wrong in a building, most landlords understand that having protection in the form of commercial buildings insurance is sound business sense. However, although coverage may seem essential, there is no legal requirement for landlords to obtain insurance. 

Even so, there may be some circumstances where commercial building insurance is required. If the property is being purchased on a mortgage then the lender will typically insist that there is a policy in place to protect the property.

The majority of building owners invest in a policy and then pass on the cost of the monthly premiums to the tenant under the terms of the lease. This protects everyone in the building without the landlord having to bear the cost. 

Coverage amounts will vary and depending on the cost of the rebuild, size of the building, and location, the required limits will be different. And most include property owners’ liability insurance with coverage in the range of £2 to £5 million; any additional or specialised add on will increase the monthly premium. It may be wise to engage the services of a professional to help you determine the correct policy limits for your property.

As policy premiums can fluctuate between different insurers, using a quote comparison engine that the one available at NimbleFins will help you to compare quotes side by side to review policies, compare terms, and find the best deal on commercial building insurance. 

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