Whilst the core cover for commercial let property policies is fairly consistent across most underwriters, discrepancies start to crop in for several sections:
Most of these sections are automatic to some degree with our main panel of underwriters although it is important to remember that they are frequently paid for extras with other insurers. Not only this, but there are many other sections, of which some may be extremely pertinent to your needs. You are highly unlikely to hear about them from a company that uses a scripted call-centre.
Protects you against large inflationary increases over a period of time. If your building is a considerable construction, it may take a great deal of time before it can be re-built. Over a period of two or three years, the original estimate for re-building cost may have increased dramatically. This cover is not usually automatic to most policies and should always be considered.
You can insure for rent that is lost following an insured event. For example, if your property is considerably damaged by fire, your tenant will almost certainly be able to withhold payment under a standard lease agreement until the damage is put right. As with Day 1 inflation protection, it may run into years before a property will be usable once more and cover beyond the standard 12 months should also be considered.
Terrorist events are fortunately relatively infrequent, although insurers now exclude it completely from cover. Terrorism cover is available via your property insurer, underwritten through the Government initiative, 'Pool Re'. Cover is not selective however and if you require terrorism cover for a single property, Pool Re stipulate that it must also be purchased for all your properties. Terrorism cover is also available independently through certain Lloyd's underwriters
Many buildings have a risk of legionellosis, commonly referred to Legionnaires' disease. It is transmitted by inhalation of contaminated water mist from devices such as cooling towers, air conditioning and showers etc. Legionella organisms can be found in many types of water systems, however, the bacteria reproduce to high numbers in warm, stagnant water (90°-105° F). Regular health & safety inspections, particularly of air conditioning equipment should be maintained, although the property owner may be liable were an outbreak to occur. An extension for Legionellosis to the liability section of the policy is available with some underwriters.
Many types of equipment should have regular checks to ensure they do not pose a health & safety risk. In addition to air conditioning equipment mentioned above, the following equipment should also have inspections: Lifting equipment:- passenger & freight lifts, escalators, hydraulic lifting tables, winches etc. Pressure equipment:- boilers Electrical: fixed wiring and portable appliances Although standards and particular intervals of inspections are not always specified in law, it is a broad requirement of Health & Safety legislation that persons responsible ensure 'suitable and adequate' checks are conducted by a competent person and any necessary remedial action swiftly taken.
This section is occasionally overlooked by property owners and it is the main section available under a property policy that is specifically required by law. If you don't employ anyone, then naturally you don't need to worry about it. Employment law however, can be quite complicated and there are many circumstances where you are considered to be the employer, even when using contractors. See www.direct.gov.uk
Once you have evaluated the requirements for the perils listed above, property owners and managers (especially those with sizable portfolios) will need to check on some important gaps in cover that will still remain. Even more extensions to the policy are are available, some of which could protect the property owner from significant exposure of which they may not even be aware. These include Privity of Contract or Enterprise zones. Please call us - we're happy to talk you through the fine detail.