The correct insurance cover to protect your property assets

The correct cover is essential to protect your valuable assets

The biggest asset in the UK is its commercial property and housing stock. The estimated rebuilding costs of the entire UK are estimated at £3,000bn. All this property is owned by someone and to our benefit, most is insured! The majority of houses are owner occupied but more and more commercial premises are held as investments. There is also the growing buy to let rental market.

Many businesses have chosen to own property in the directors names, transfer it to trusts or pension schemes or enter into sale and leaseback arrangements. Some have sub-tenants or rent out space which is surplus to requirements. Many clients have also invested in property through buy to let, feeling this as an excellent long term asset and of course there are large numbers of property companies whose business is to own and develop property.

If you own investment property for any reason, it is important that the insurance you have is arranged to protect you against all eventualities. In most cases, the cost of cover is passed on to the tenants who often have a full repairing lease so they also have a vested interest in ensuring the cover is correct.

One of the most important issues is to ensure the sum insured is adequate to rebuild the premises if they are destroyed or damaged. With material costs rising rapidly and planning controls becoming ever more stringent, rebuilding can be delayed and the costs far more than anticipated. Buildings may have to be demolished and professional advisers employed. It is most likely that higher standards of construction will be required and green, environmental and climate issues recognised. Delays in rebuilding in a period of higher inflation will increase costs. It is always advisable to have regular rebuilding cost valuations done to ensure sums insured keep in line.

Other covers which are normally required are:

Loss of rent - This will cover any drop in rental income whilst the premises are rebuilt including the costs and loss of income if the existing tenant is lost.

Property owners liability - This protects the owner from claims from tenants and the public arising out of the ownership of the property or the use of any contractors etc.

Employers liability - covers the employment of full time or casual employees.

Plant - it may be advisable to cover key plant against breakdown and use an insurer to check all the plant, and facilities including electricals comply with H&S regulations.

Contents - Often owners also own contents which are in common parts of a building and these should be covered.