Commercial (Real Estate) Property Owners Insurance
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If you own commercial property, you need to ensure that it is adequately covered with a comprehensive and competitive property insurance package.
Commercial Property Insurance protects your organisation against physical damage to, or loss of, your property assets. In the case of catastrophes like fire, explosion, theft, or vandalism, Property Insurance helps cover the costs of repairing or replacing damaged business property to allow your organisation to continue to function as normal.
Whether you are a freeholder, leaseholder, mortgagee or owner, your premises represent a substantial investment that should be adequately protected. A Commercial Property Insurance policy will help you to repair or replace property that was damaged by a fire, storm, water damage, theft, vandalism or other insured perils. A peril is a harmful event which is covered under a contract of insurance.
If you rent or lease a building to a tenant, the property they own inside the building usually won’t be covered by the commercial property policy. Your tenant needs to insure their machinery, furniture, stock and contents themselves under their own business insurance, to include also liability insurance.
Usual covers provided under a Commercial Property Insurance policy are as follows:
Buildings Insurance
Cover can be provided for Material Damage to the property on an “All Risks” basis which provides cover for all risks of physical loss or damage to the commercial property insured including Theft, Glass & Subsidence. Other covers provided may include Fire Brigade Charges, Trace and Access, Loss of Metered Utilities and Damage to landscaped gardens and grounds amongst other additional covers depending on your insurer.
The policy covers many perils (a harmful event which is covered under a contract of insurance) , such as Fire, Storm, Lightning, Explosion, Aircraft, Riot, Civil Commotion & Malicious Damage, Earthquake, Flood, Escape of Water, Impact, Theft, Glass & Accidental Damage.
Public/Property Owners Liability
Property Owners’ Public Liability cover is usually included with standard Property Owners Policies and covers third party property damage or injury claims brought against the insured by a third party as owner of the property. Often referred to as the primary layer, the limit of indemnity sought should be at least €6.5m.
Property Owners Excess Liability cover is a form of reinsurance that covers liability losses incurred by the insured in excess of the primary layer of liability amount, up to a higher amount, for example €3.5million excess of €6.5million primary limit giving a total combined liability cover limit of €10m, which may be vital in locations of high footfall like shopping malls, cinemas and business districts.
Employers Liability
Employers Liability cover is often included under a buildings insurance policy and it covers claims brought against the insured as owner of the property for death, injury or illness of an employee working on the property during the course of their work. A typical example would be injury caused to a temporary employee carrying out minor property repairs.
Employers Liability for Property Repairs: The principal reason for arranging liability insurance is to protect you against claims made against you in respect of your legal liability for personal injury and property damage. In order to make sure you have the right cover in place you need to look at how these claims may arise.
Business Interruption
Business Interruption provides cover against consequential financial losses that may occur after your property loss / damage.
Cover includes costs and expenses should the property become uninhabitable following an insured event.
This section of the policy covers loss to the insured, following a claim for property damage, of rental income, service charges and rates incurred following the damage and loss of revenues/profits or the additional costs associated with you having to relocate to alternative premises.
Indemnity Period.
The period commencing from the date of loss to the expiry of the insured indemnity period (i.e. 12 / 18 / 24 / 36 months) where the premises insured may be damaged as a consequence of a loss. The loss could occur on the last day of the policy period whereinafter the indemnity period kicks in i.e. your rental income could be cover for up to 36 months after the date of the property damage loss occurs.
Policy Excess
Your policy excess is the amount of money which you are required to contribute towards any claim i.e. it is the self-insured portion of each and every claim made under the policy.
Terrorism Insurance
Terrorism insurance will indemnify you in respect of losses resulting from loss or destruction of or damage to property and business interruption losses insured under the property owners policy, directly caused by an Act of Terrorism occurring during the Period of Insurance.
If you have a mortgage on your commercial property, your bank may require this cover to be taken out as standard to run alongside your commercial property insurance policy. This is usually the case in relation to high value property portfolios or risks located in city business districts which pose a higher than normal threat of a terrorism strike.
Legal Expenses
Commercial Legal Expenses insurance entails cover for legal expenses incurred in defending a civil action taken again you, the business. This applies provided that costs and fees are incurred with the Insurer’s written consent and the incident falls within the scope of the policy cover. Cover generally includes legal costs defending or pursuing the likes of employment disputes, health and safety prosecutions, data protection issues, jury attendance costs, statutory licence protection, contract disputes / debt recovery, property protection and bodily injury claims.
Commercial Lease Protection – Defending your legal rights in a dispute with a tenant arising from a breach or alleged breach of the tenancy.
Engineering Insurance
Engineering insurance is a specialised coverage addressing the needs of those responsible for Statutory Plant & Machinery, which includes inspection and Sudden & unforeseen damage cover including breakdown from internal defects. Examples are passenger / goods lifts, lifting plant and pressure plant including barista machines.
Clause 26 – RIAI Form of Contract
When you, engage in a RIAI (Royal Institute of Architects Ireland) Standard Form of Contract for contract works involved with the alteration or extension of an existing structure, Clause 26 is the inserted clause which relates to the ‘Responsibility for Existing Structures’ and effectively places the onus on you as the ‘Employer’ to insure both the existing building and its contents for damage for the specified perils listed.
However it is standard market practice in the insurance industry that any existing structure/property that is undergoing works of alteration or extension, whether vacant or not, cover under the property owners insurance policy will provide the perils of Fire, Lightening, Explosion & Aircraft only and not the specified extra perils as noted in Clause 26. The insurance policy will also automatically exclude any damage caused by contractors/builders. It is therefore important that you discuss with the Contractor about the removal of Clause 26 from the contract where applicable.
The Contractors ‘Contractors All Risks’ policy will provide cover in the event of any damage caused to ‘new’ permanent or temporary works during the course of the contract and your Public Liability will provide cover for Third Parties in the event of any bodily injury or property damage occurred during the course of the contract.
S.A. Faughnan (Brokers) Ltd. have been in business successfully for over 30 years and have a wealth of experience in all areas of commercial insurance and risk management. See our Testimonials page on www.safaughnan.ie
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Remember – If you are a commercial property owner or an estate management or property managing agent, take a look at our website (www.safaughnan.ie), give us the opportunity to provide terms on a piece of business and you will see our competitiveness and efficiency as well as our technical knowledge and it will impress you!
Our Testimonials Page shows the calibre of client we act for and together with our 30+ years in commercial broking, we make a formidable team!
