Commercial Insurance Profile – November 2021

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The Importance of Business Interruption Insurance 

Unexpected business interruptions can be financially devastating. Fortunately, there’s a way to prepare for them.

The two most common forms of business interruption are fire and flood. Unfortunately, statistics are showing a trend towards increased rainfall in the UK. According to the Met Office, the UK was an average of 6 per cent wetter over the last 30 years (1991-2020) compared to the 30 before that. Flooding remains a risk to businesses, but not only from rainfall, as events like a burst water pipe can be just as problematic.

A flooded building can take between two and six months to dry out and become habitable. While building and content insurance policies will cover the initial damage, businesses must consider how they’ll cover financial losses while unable to trade. This is where business interruption (BI) insurance comes in.

During the recovery from an interruption, a business may be unable to operate whilst leads to a loss in revenue. This downtime, in turn, may result in the loss of irreplaceable staff and valuable customers. To minimise this risk, a business would benefit from trading at a temporary location while their main premises is repaired. Yet, traditional buildings insurance doesn’t tend to cover this move or the associated loss of income.

BI policies can be added to building and content policies to fill this void. Policies can include:

  • Compensation for lost income while the business is out of action and gross profits that would have been earned had the major event not occurred
  • Operating expenses incurred, such as utilities and rent, even though the business has temporarily ceased
  • Compensation for the increased cost of working, including the expenses of operating in a temporary location while repairs to the permanent premises are completed
  • Help towards the cost of the employee payroll

BI insurance can be a lifeline for businesses in the event of a disaster. Businesses can feel safe knowing that they’ve prepared for the worst by adding BI insurance to their existing policies. Contact us today to find out more.

Autumn Commercial Building Maintenance Tips

Winter in the UK can often feel cold and long, and it can take a toll on commercial buildings. Autumn is a good time for commercial businesses to make sure their buildings are properly maintained before temperatures drop and the weather worsens.

Businesses should consider these commercial building maintenance tips:

  • Routine maintenance checks—Pipework, boiler and plumbing systems should be regularly inspected year-round. As winter approaches, such checks become even more important because a failure in one of these systems – eg not having hot water – will impact both customers and employees. Pipe insulation should be checked, too. In colder conditions, exposed pipes could freeze, expand and burst.
  • Electrical analysis—Electronic components and appliances should be checked thoroughly to make sure they’re working safely and don’t present any risks. The review should include electrical switches, sockets and fuse boxes. Finding any cracks or signs of deterioration early will allow a business to correct the problem before it gets worse, saving time and money in the long run.
  • Roof and gutter inspection—A thorough roof inspection will allow businesses to spot potential structural issues early and ensure gutters are free from debris. Intense rain spells—more likely in winter—make it easier for gutters to become clogged, causing rotting and water damage to the fascia board.
  • Flooding preparation—According to the Environment Agency, 1 in 6 properties in England (around 5.2 million properties) are at risk of flooding. Businesses should check if their insurance policy covers flood damage and consider how best to mitigate risk (eg storing stock above flood level).
  • Alarm check—Businesses should examine and service any fire and burglar alarms to ensure they’re secure and protected.

Though planning for a disaster is a lot of work, cleaning up after one is worse. Proper maintenance allows a commercial business to spot potential problems early and take action. Paying attention to regular maintenance will help a business avoid unnecessary costs down the line and ensure safety and security to its employees and customers. Contact us today to find out more.

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