Choosing the correct commercial insurance for your business needs can be daunting enough even for a seasoned businessman or negotiator. For a start-up enterprise ensuring that the business has full and proper protection against all risks, it is an even larger minefield.
There are however some basic rules of insurance, which if born in mind while looking for the right commercial policy, will ensure that the enterprise is neither under or over insured and has the necessary cover in force.
For a commercial insurance contract to be valid the proposer must have what is known in the industry as ‘an insurable interest’ in the object of the cover. This immediately helps define the type of property insurance policy that a businessman might require.
The business risks to be insured under the policy are not the physical object themselves but the financial value of such, which is defined as the interest that a policyholder has in the objects should they suffer loss if the insured risks occur.
Clearly then the type of policy that a business will require depends upon whether the proposer is the owner of the commercial property, or a leaseholder or tenant.
An owner of a commercial premises who lets or leases a building, no matter the type of business activities that may be pursued there, would only have an interest in the buildings fixtures and fittings of the property concerned and any liabilities to the public that may arise from these.
A lease-holders interest in the buildings may be dependent upon contract of lease and should be checked thoroughly with the agreement. Often a contract will make it the responsibility of the lessee to provide cover for the lease term.
Owner occupiers of commercial premises will have a financial interest in both the buildings and contents of the property and will require insurance for both.
Rented commercial property buildings cover is not usually the concern of the tenant who will only have an insurable interest in any contents of the building and in any improvements that they may have made to the property in order to carry out business.
Before getting any commercial property insurance quotes it is necessary for the businessman to calculate the values of all the buildings, contents and stock. Buildings value should be based upon the rebuilding costs following a total loss and allowing for inflation. Accurate annual turnover figures will be required for contents insurance. If high value stock items are kept at the property, then the value of these should be determined individually.
Applying for commercial insurance quotes online might only take a minute or two to complete, however the preparation needed to obtain accurate data to supply to the insurance company could take a lot longer. It is unlikely that even the small businessman has calculated the value of his office contents for replacement purposes.
Ensuring that the information you supply on a commercial insurance proposal form is correct, is not only legally required, but is essential if you wish to avoid problems if a claim has to made at a future date. Problems can quickly arise with disagreements over the value of stock or office equipment values following a major loss, especially where the declared values are not sufficient and an average or proportional reduction to a claim is imposed.
Having established any property risks that a commercial enterprise may be exposed to it is then necessary to look at all the potentialities and risks that the business might be liable for, in the course of carrying out its commercial activities.
Liability insurance is essential for all enterprises, large or small.
Public liability insurance protects the business against any claims from the public for loss or damage suffered, for which the business could be held liable. Employers liability, a type of workers compensation insurance, protects a business against being sued by its employees and is a legal requirement.
Most commercial liability insurance is sold by trade or professional type with risks and covers that are specific to that business type. Additional liability insurance such as professional indemnity insurance which covers professionals against negligent advice or product liability for shops providing goods, are examples of such.
Buying a combined tradesman or professional service stand-alone liability product is today a simple process using one of the many liability insurance comparison websites that exist online.
It is possible to buy commercial insurance for both liability and property combined for any type of business, under what is called a ‘combined commercial insurance policy’. This type of flexible contract allows specific risks to be added and limits of indemnity chosen and is often known as ‘all risks’ cover.
For specific types of commercial insurance risks such as shops and offices, where property values and liability cover can be easily assessed, it is now possible to compare many covers and buy online what are known as packaged policies.
The Internet offers many full ‘all risks’ commercial insurance policies covering every eventuality and consequential loss, which are available from online insurance brokers, comparison sites and direct from commercial insurance companies themselves. If you have any doubts about the necessary cover for your particular business it is advisable to consult a commercial insurance broker who will offer advice and the latest market information.