Office Insurance – What Cover do I Get in a Serviced Premises?
One of the biggest costs associated with any business, aside from salaries, is the actual renting or purchase of the business premises where you will trade from. Most new ventures will therefore either trade from home, share premises or rent from someone else.
As far as renting is concerned, you tend to have a couple of options. You can either rent your own separate unit and enter into a commercial lease, usually 3 to 5 years. Or, you can rent a suite within a serviced business unit.
Traditionally, renting in a serviced unit was purely for offices but most types of businesses can now take up this option. The benefits tend to be that you are not tied into a long, onerous lease and you have a lot of what you need already supplied. Most serviced units will, within their charges, provide you with carpets, furniture, partitions etc. What they do not supply is computers, electronic office equipment and laptops and other portable equipment.
You will need to arrange a separate office insurance policy which provides cover for these assets, which belong to you and not the premises owner. It is very easy to think that you have cover automatically within the terms of the lease but this is not usually the case. You can refer to the building owners but their terms and conditions will not normally cover your business assets.
As well as cover for the physical items you own, you will need to get your combined liability insurance covers (employers, public and products) as well. The good thing is that UK commercial insurance companies do have simplified package polices. You can include, in addition to your assets and liabilities, cover for cash, business interruption, goods in transit and commercial legal expenses.
If you are sharing a premises, and do not have your own separate lockable unit then you must declare this to insurers. Most will not provide theft or malicious damage cover, as you are not solely in control of the security. Others will provide cover, but restrict theft cover only if there has been a physical break in, as opposed to a “walk in, walk out” theft.
As ever, you need to speak to an independent business insurance broker about the different cover options and associated costs. Most brokers will turn a quote round in 24 hours and premiums (annually) start at £262.50.
Commercial Landlord Insurance – Contents Cover
If you own, and rent or lease out, a property to a third party then you will need to have a residential or commercial property owners / commercial business insurance policy. Residential, is of course for houses and flats and is also known as buy to let insurance. Commercial is where you lease a business premises to a third party. Where there is a cross over, for example a shop with flats above, then this will always go under a commercial property policy.
It is not difficult to work out, in the main, what is covered. The building, or the structure, is what you need to have cover for. It is the actual bricks and mortar, roofs, windows, floors and internal fittings. Think of the buildings cover as everything that you would not necessarily take with you when you move house or premises. You may have a fitted laminate floor, this would fall under buildings. But what happens to curtains, carpets and flooring (including carpet tiles and moveable laminate)? Where should this be covered?
This will fall firmly and squarely under the contents insurance. Even if you have a carpet, which you would of course not take with you when you moved, this falls under contents because, if you wanted to, you could pick it up and take it with you.
This really only applies in the main to residential let properties. If you have a block of flats insurance policy, then you will need to give special consideration as to whether you have suitable cover for contents in communal areas. Speak to your business insurance broker about getting this included.
For single let residential properties, over 80% are let unfurnished. But, what a letting agent calls unfurnished and what a commercial insurance company call unfurnished are two entirely separate things. If you have carpets, curtains or any fitted white goods (ie fridges, freezers, dishwashers, washing machines or tumble dryers) then you need to have contents insurance.
Contents cover can be slightly more expensive than the buildings because it is more susceptible to damage and/or theft. But, without the cover you could be left financially out of pocket. The major source of claims to let properties is water damage. This is from burst pipes or storms. If water leaks in, it will always go to the lowest point and this usually involves damage to the flooring. You can, in very few cases, use a de-humidifier to remove any water from a carpet but this is notoriously difficult to do. You may think that it is clean and dry, but this is only the top. If water has seeped through the carpet then it will start to rot unless it is dried thoroughly. This in tune can start to rot any wooden floorboards, or worse still ruin any chipboard as this acts like a sponge.
If you have a landlord’s insurance policy, please take the time to review it to see if you have suitable buildings and contents cover. You will always need to insure for the full replacement cost. What this means is that you cannot just have 1,000 of cover, if it would cost 5,000 to re-carpet the house. As always, you are better arranging any type of non-domestic cover with a business insurance broker and they can help you source the right cover.
Cheap Commercial Insurance – Top Tips to Getting a Good Price And Cover
Given the financial problems of the past few years, anyone who is in business are now looking a lot more closely at the premiums they pay for their business insurance.
Traditionally, if a renewal was within 5%, up or down, of the previous year the majority of businesses were more than happy to continue the commercial insurance cover. But, with businesses having to, out of necessity, look at every item of cost, their annual insurance bill is coming under increased scrutiny.
The commercial insurance industry has spent years and years under pricing, charging too little to customers in the hope of making up shortfalls in investment income. This investment income could add 10-15% to an insurers income, which could be used to offer prices less than competitors.
Nowadays though, the investment income is less and the claims costs are increasing. As a result the under-pricing has had to stop. We always see this in motor insurance first. Costs have rocketed for younder drivers, particularly since Quinn Insurance got into financial difficulties and had to stop trading in the UK.
This is now starting to spill over inot the commercial insurance arena. Insurers that were happy to offer an annula premium of £600 for a risk are now saying that the renewal has to £800. Increases of 15-25% are not unheard of; particularly for the “leisure” trades ie pubs, hotels, restaurants and take-aways. This is a problem as these are some of the industries that have been hardest hit because of the recession.
We are seeing insurers becoming tougher and touhger on pricing, even for risks that have been claims free for years. This does not mean that there is not an answer though. If you have found yourself in the un-enviable position of having a significanlty increased renewal, have no fear as help is at hand.
There are a few tips to getting you a better or equivalent deal.
The first one is to set aside some time. Not everyone wants to spend time on their business insurance. It can be confusing, time consuming or even boring to get alternatives. But, set aside at least an hour of your time, on your quietest day of the week.
Secondly, get all of your papers together for the past few years. The more paperwork you have, the more this will help.
Thirdly, speak to an independent business insurance broker. Do not go to a website that does not offer you the chance to discuss your cover. Whilst these sites that compare business insurance may look good, because of the prices, what they do not make clear is that there are sometimes big differences in cover and excesses.
Get a broker that you can speak to, either face to face or over the phone. Go through all of your documentation and, whilst we cannot guarantee it, in 80% of cases they should be able to offer you a better deal (price wise) and better cover.
Business Insurance – Key Facts Summary of Cover
Here in the UK, you have two options when looking for a business insurance quote. Firstly, you can speak to a broker or intermediary and secondly, you can go direct to the insurer.
The first option is one that everyone apart from the direct companies will always advocate as it gives you choice. You may get a quote via an insurance comparison site or through your bank, these are all types of intermediary because they are seeking information from you, in return for a quote.
When looking for a quote, you must, by law, receive certain information. You must receive this information either in hard copy or electronic format.
If you do not receive the following three things, then you have not received a legally binding quote and your broker or insurer has failed in their service to you.
Firstly, you need to receive a quotation document that identifies you, your address, what you do, the sums insured or limits of indemnity applicable and what type of cover is provided ie public liability, professional indemnity or a full commercial combined insurance package.
Secondly, you should receive a terms of business between the intermediary or insurer and you. This should contain details of what they will do, their charges and their Financial Services Authority regulation status. You must watch out for fees and charges. Some brokers will charge you up to £50 for a duplicate employers liability certificate, which only costs a pound or so to produce.
Lastly, a summary of cover. Any quote is based on a certain type of policy. If you accept the quote, then you will (within 30 days) receive a policy wording. At the quote stage, you will receive a simplified version of this policy in the form of a Key Facts document. This is intended to outline the cover provided and the major exclusions applicable. For example, a shop insurance key facts will outline that theft cover is included, but shoplifting is excluded. It is difficult at times when you are faced with an onslaught of paperwork, but you really do need to sit down and read through the documents.
It doesn’t matter whether you are looking for a small business insurance quote or you are a major multinational looking for a multi country commercial combined insurance, you will need to see these three things. They may not come as three separate documents but they should be easily identifiable.
Your insurance is more than important, it is vital. If you buy the wrong cover your business may suffer irreparable damage. Take the time to read through what you receive before agreeing to take out the policy. If you do not understand anything, speak to someone. This raises a final point that if you go to a comparison site, they only sell based on price. The cost to you, apart from the premium, is that in the event of needing clarification or just to discuss a quote, you are on your own. They do not usually have people available to talk to. This is one of the other benefits of speaking to a broker.