Navigating Commercial Property Insurance: Answering Your Most Asked Questions

Table of Contents
Table of Contents
Table of Contents

Navigating the complex landscape of commercial property insurance can be quite daunting. Our insurance brokers can help you understand your policy, terms and coverage options without confusing you with the endless jargon. We have summed up the questions that often arise when contemplating which commercial property insurance is right for you.

Where Can I Get Commercial Property Insurance?

Commercial property insurance is best found through an insurance broker. Not only can a licensed insurance broker give you personal advice, they are also able to approach the major insurance markets to try and find you a fit for purpose policy at a competitive price.

Insurance brokers specialise in giving advice on insurance products, and have relationships with a range of insurance companies to sell their products and arrange cover. Many commercial property insurers do not have the systems in place to deal with customers directly; which is why insurance brokers are able to obtain quotes from a wider range of companies than what you can find online.

When you call an insurance company directly, they can sell you what you ask for. However, if you don’t know what you need, they generally can’t give you personal advice. If you are happy to share your circumstances, our insurance brokers will make sure the policy you get is fit for purpose and matches what you need. Find out more with CIB commercial property insurance quotes.

What Is Business Property Insurance?

Business property insurance is a broad term that can refer to any policy that insures a business’ assets including buildings, contents and stock. This can include cover for commercial landlords insuring buildings, or tenants insuring their fitout and day to day stock.

Often this type of insurance is sold as part of a “business insurance pack” which has different sections of cover where you pick and choose what you want to be covered for. This is very different to home insurance where you are usually covered for most things just by picking your home or contents sum insured.

So, for example, you will insure your commercial building for “fire & perils” and then you might choose to add accidental damage, flood cover, broken glass or machinery breakdown all as separate options. When you insure your contents, you then have to make sure you cover them for theft or decide if you want portable contents cover too – as that is not automatically included.

Our insurance brokers can explain these sections and listen to you to make sure you get the right things covered to help you arrange your business property insurance effectively.

Example Where Commercial Property Insurance Is Needed? And Who Needs Commercial Property Insurance?

Commercial property insurance is needed by banks and finance companies to show the asset they are lending on is insured against loss. Many banks will request a Certificate of Currency from a suitable insurance company showing that a building is insured against major perils before they will approve a new loan or refinance. The same applies to equipment financiers who are lending on new contents or fitouts for businesses.

If you are entering a commercial tenancy agreement, you might find your lease agreement has a requirement for you to have suitable commercial property insurance in place. This provides peace of mind for the landlord that in the event of any damage to your contents/stock, you won’t face immediate financial distress or risk breaching the lease by going bankrupt overnight for a peril outside your control.

Although these types of situations are times you might be forced to have commercial property insurance, every business who has any meaningful assets (buildings, contents or stock) needs commercial property insurance.

How much cover you need is something you can discuss with your insurance broker. Clauses like “underinsurance” exist in the fine print, so it is important to make sure you take out the appropriate amount of cover for the type of policy you have as you don’t want to pay for a policy only to find out it won’t pay you as much as you need it to at the time of claim. Our insurance brokers can give you personal advice and help work this out with you to find a fit for purpose policy.

Why Is Commercial Property Insurance So Expensive?

Commercial property insurance can vary greatly in price depending on a range of factors. It doesn’t have to be expensive, but if you are conducting higher risk business activities, then the cost of insuring the building will be more than someone who is doing a less risky business. It costs more to insure a café with deep frying equipment than a consultant’s office for example!

The key is making sure you are paying a reasonable price for the risk your business represents. You can check the market to see if your premium is reasonable by asking your insurance broker to remarket your policy for you. Even if your policy seems expensive, the cost of commercial property insurance with the other insurers might be significantly more!

Your insurance broker might also be able to discuss other options to make your commercial property less expensive such as increasing the excess, or they might be able to help you pay via monthly instalments to reduce the impact on your cash flow.

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