Are you a Landlord of a Commercially Let property?
Commercial property insurance helps businesses pay for repair or replace property that was damaged by a fire, storm, or other event covered by the policy. It also pays to replace stolen or lost property.
You can buy a single policy to cover a business with more than one location, unless the locations have different functions and risk profiles. For instance, you might have an administrative office at one location and a factory at another. If your business has operations at multiple locations, you may need separate policies.
If you rent or lease a building to a tenant the property they own inside the building usually won’t be covered by the property owner’s policy. Your tenant needs to insure their machinery, furniture, stock and contents.
- Material Damage this cover can be “All Risks” cover
- Public/Property Owners’ Liability- You can obtain cover for €2.6m or €6.5m
- Business Interruption / Loss of Rent
- Legal protection
Understanding Commercial Property Premiums
Insurance companies use a process called underwriting to determine the frequency and the likelihood of a possible property claim. The greater the likelihood of a claim, the higher the premium will be.
Fire Risk is usually the primary factor that determines a business’s commercial property rates. Insurance companies sometimes carry out inspections or surveys as part of the underwriting process. Fire inspectors use a standard rating system and weigh five factors to determine a structure’s fire rating.
- Construction materials:Buildings made of potentially combustible materials will have higher premiums, while those made of fire-resistant materials could earn a discount. Additions to an existing structure might affect a fire rating, so it’s a good idea to talk to your broker before remodelling. Internal structural elements can also affect a fire rating. Using wood partitions, floors, and stairways in an otherwise fire-resistant building will likely nullify any rate reduction. Fire-resistant interior walls, floors, and doors can help maintain a good fire rating. Composite panelling can be a considerable fire risk.
- Location: Buildings in cities or towns with good fire protection typically cost less to insure than buildings outside a city or in areas with limited fire protection.
- Occupancy: A building’s use also affects its fire rating. An office building will likely rate better than a restaurant or motor repair shop. In a building with multiple tenants, one hazardous occupant will negatively affect the fire rating of the entire building. If your business is in a building with a more hazardous tenant, your premiums will be higher.
- Fire protection measures: Integrated Fire Alarm system can reduce a building’s fire rating.
- Exposure: Nearby hazards increase a building’s fire risk. Proximity to external fire hazards, such as a lumberyard, a tyre storage facility or an oil storage tank, will affect a fire rating even more. Other things that could affect your fire risk include cluttered buildings and grounds, heavy mechanical or electrical equipment, or volatile materials stored on site.
If you have specific questions about your commercial investment property insurance cover, talk to the property insurance experts at SA Faughnan (Brokers) Ltd., who have over 35 years’ experience in general insurance…