Property 101

by Insurr 20 Dec 2016
Property, home or building insurance, is one of the largest and most important markets in the insurance industry. Whether you are insuring a commercial property, an industrial property or a residential property, this will be one of the most important insurance policies a client will need to consider.

Generally, a building and contents policy will cover the actual building itself as well as the contents within. This will usually be against things such as theft from burglary or damage by fire or flood. This includes the actual structure of the property as well as permanent fixtures such as bathroom and kitchen fittings, roofing, walls, ceilings, floors, doors and windows, built-in cupboards or wardrobes, and outdoor buildings (eg sheds, greenhouses and garages). It is essential to take out a home insurance policy if you are getting a mortgage.
Due to climate change, insurers are seeing more and more cases of damage caused by flooding due to natural disasters. It is therefore important for clients to make sure that if they are in a high risk area to make sure that their policies extend to this too. This may also require extra prevention measure to make the policy valid. This may include features such as altering drainage pipes to avoid sewage back-up, fitting doors and windows with flood skirts or guards, replace wooden flooring with concrete and/or using water-resistant render on the walls. Other incidents that should be covered by most policies include lightning strikes, storm damage, fallen trees, gas leaks, earthquakes, vandalism, vehicle collisions with the building, and bursting or freezing of the plumbing. However when insuring a property it is important to bear in mind to insure the cost of a rebuild and not the market value.

Contents insurance will largely depend on the value of what is contained in the building. Standard items covered include furniture, personal property and high-value items such as electrical equipment (eg televisions, laptops, computers, home entertainment systems, cameras, etc), jewellery and antiques. Specifically catered contents packages are available for high-value homes where insured items are of a greater value. These may include things such as money kept on the premises, high-value art (eg paintings, sculptures, figurines, ornaments, etc), wine, furs and cars.
If you are renting a property then it is the landlord’s responsibility to insure the premises. However it is the tenant’s responsibility to take out contents insurance to protect their personal possessions.

Commercial property insurance is for landlords who are renting out their properties to a third party for commercial use. Commercial properties can include offices, wholesalers, restaurants, shops, hotels and public houses. This is different to domestic landlords insurance who rent out residential properties to tenants. The most common risks for this type of landlord are property damage or injury to tenant through personal negligence. In these cases it is the landlord’s responsibility to ensure that the property is properly inspected and maintained.
Landlords can take out different types of policies depending on the use of the building. These can include short-term lets, unoccupied dwellings, economy lettings or various combined policies.
Landlords can also insure themselves against the loss of rental income in case the property becomes uninhabitable due to fire or other severe damage. This can also extend to help with legal fees if taking a tenant to court if they do not pay their rent. Other things to consider as a landlord are protection against unoccupied properties as they are more susceptible to break-ins, squatters or vandalism, malicious damage by tenants or accidental damage such as natural wear and tear.
Renting out buildings as offices, activities or retail units will require public liability in the case of accidents on the premises causing personal injury due to the negligence of the building owner.

Similarly, industrial property follows the same processes but is aimed at premises that contain plant and machinery equipment that require regular safety inspections as well as risk assessments. Risks for these types of building range from fire, explosions, riots, malicious damage, storms, flooding, road and rail vehicles, or leaks from tanks, pipes or sprinkler systems. Contents-wise, stock will need to be insured at cost price value. And plant and machinery equipment can either be insured as replacement as new or an indemnity basis. Other things to consider from the operations of the business occupying the premises will be product liability for manufactured stock and financial loss due to a business interruption.