Business insurance can be a complex subject, with many internal variables that need to be examined before a wise decision can be made. For this reason, anyone considering business insurance should first seek the advice of a reputable broker.
As with most insurance types, business insurance is used to protect the business and the business owner should unforeseen events happen to the business. The trick is to make sure that your business is covered for those events that are most likely to happen and to never find yourself unprotected, which might lead to the financial collapse of the business.
Business insurance can be purchased to cover virtually every aspect of the business. For example, most business owners have a policy that protects them should they lose their business property. Fire and theft insurance would be two means of doing this. Business owners may also want to protect their inventory and their equipment. As well, they most often want to have some form of protection in case an employee is injured on the job.
The types of business insurance and the levels of coverage are often determined by the type of business itself, but it can also be influenced by lenders who hold portions of the business as security against loans that may have been made to the business in the past. Lenders who have financed expensive machinery or other types of equipment will often want the business owner to have some form of insurance on the machinery. This use of insurance helps to protect the lender as well as the business owner should loss occur to the insured item.
At the very minimum, you want to make sure that your personal liability is covered by some form of business insurance. Ignoring this may cost you everything that you have worked for and earned.
Insuring your rental property correctly
There have been a number of stories in recent months about how landlords have suffered costly damage to their rental properties and have not been covered by their insurance policies. Such stories highlight the importance of carefully scrutinising what is and isn’t covered in your landlord’s insurance policy.
Following an argument, an angry tenant left his property owner with £17,000 worth of damage. The destruction included abusive graffiti, animal faeces and vandalised fixtures and fittings, which the Blackpool landlord believed may have been caused by intentionally breeding dogs in a ‘makeshift cot’. The landlord was not fully covered, as his policy excluded damage caused by tenants and animals.
There are several common exclusions that come with landlord policies. Accidental damage is not always excluded, but cover is inconsistent from one insurer to the next. Some policies include damage caused by children, for example, whilst others do not.
Many accidental damage clauses can be extended to offer additional cover. Remember, though, that your tenants should insure their own belongings – you are only obliged to ensure the structure of the building and any belongings you provide as part of the tenancy.
Animals: Chewing, fouling, scratching and tearing damage caused by animals are, as the unfortunate property owner from Blackpool found out, often not covered.
Sometimes damage caused by attempts at amateur repairs will not be covered. This might also include damage caused by cleaning. Insurers often will not cover damage unless the job was completed professionally, but a professional trader should also have professional indemnity and public liability insurance.
Malicious damage by your tenant (or by anyone when the property is vacant) is frequently excluded.
Where an insured peril might be covered but this can be argued to be as a result of malicious damage, an insurer may reject the claim. For instance, water damage may be covered, but if the damage was the result of the tenant deliberately vandalising the water pipes it may not be.
Please call us on 02076 912 409 for an appropriate quotation.