If you run a business, business building insurance is essential for your peace of mind. Whether you use your premises to store stock, manufacture goods, retail or provide services, your business needs a base to operate from.

What does a business buildings policy cover?

Business building insurance relates to the structure itself, and any fixtures and fittings attached to it. It’s worth checking exactly what is included in your policy. For example, does it cover outside storage structures? What about fences and boundary features?

The extent of the actual risks covered can vary between insurance providers. For instance, a standard list of the risks that most recognised insurance providers will typically cover may include:

• Fire
• Flood
• Storm
• Malicious damage
• Lightning damage
• Damage from riots and civil unrest

Wear and tear of a structure and damage due to lack of maintenance are not usually covered. Likewise, accidental damage is not a standard risk, but can sometimes be added for an extra cost.

What will the insurer require?

There may be conditions attached to the policy, such as any particular fire prevention measures the insurer requires, or additional recommended security measures to prevent and deter malicious damage (vandalism or break-ins).

But your obligations to the insurer continue throughout the policy. For example, the insurer will typically require you to notify them of any structural alterations you make, to ensure that the cost of the premium does not change as a result of the alterations. Further, you will typically have to let them know if you are going to leave the premises unoccupied for more than 30 days, because empty properties are more at risk from malicious damage or other hazards such as floods and fire.

What should else should you take into account?

If you have a mortgage on your business premises, you might be obliged under the mortgage document itself to obtain adequate buildings insurance cover, and for that cover to be in joint names. After all, the property is the lender’s security against your mortgage loan. Check the details of your mortgage document – some lenders do not require policies to be in joint names but merely ask for their interest in the property to be noted on your policy.

When you are asked the value of the premises for the purposes of the insurance, a professional surveyor should be qualified to assess the correct price of reinstatement or market value. Consider which value your business building insurance should cover. Reinstatement costs cover the monies needed to put the building in the same state it would have enjoyed had the damage from the insured risk not occurred.

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