Different businesses will be affected by different natural perils depending on their location. For example, coffee shop alongside one of the Cape Town beaches is more likely to be affected by a natural disaster involving the ocean than a coffee shop in one of the rural towns.
Also consider the nature of the business. While all businesses should have general insurance, such as fire insurance, other situations may warrant more particular insurance needs.
Buildings
It is essential to understand what your insurance policy defines a building as.
Usually, it is the actual structure with all fixtures and fitting and other named structures like driveways, gates, fences etc. – check your policy to ensure your building falls within the ambit of cover provided by your policy. Also, make sure you disclose non standard building construction. Examples of non standard building construction include thatch, wood, prefab etc. Please contact Chadwicks should you are unsure.
The main events covered by commercial building policies are Fire and Storm.
Always check you have read the policy exclusions. An example of a risk that is excluded is “Wear and Tear” or any gradually operating cause.
The correct setting of your sum insured is crucial, to avoid Proportionate Underinsurance penalties applying at claim stage. Invariably, the sum insured must always represent the cost to rebuild, inclusive of VAT and all costs like professional fees, demolition etc. An annual professional evaluation of your building is prudent to ensure your sum insured is correct.
Stock & Raw Materials
A common definition of stock is “the goods or merchandise kept on the premises of a shop or warehouse and available for sale or distribution”. Raw materials are those assets, materials or substances used in the primary production or manufacturing of goods.
A key determinant is that the stock assets must be for sale or distribution purposes. All assets used in the production of stock or facilitation of stock would fall under Contents, Plant & Machinery etc. Commercial insurance policies often refer to stock as all Stock and raw materials in trade.
The main events covered by commercial Stock policies are Fire and Storm.
Always check you have read the policy exclusions under the Fire section. An example of a risk which is excluded is “Wear and Tear” or any gradually operating cause.
Again, the correct setting of your sum Stock insured is crucial, to avoid Proportionate Underinsurance penalties applying at claim stage.
Plant & Machinery and all other Contents
Essentially, the assets that remain, after you have insured your Buildings and Stock, are all the other Contents and Plant & Machinery.
The main events covered by commercial policies for Contents, Plant & Machinery are Fire and Storm.
Always check you have read the policy exclusions under the Fire section. An example of a risk which is excluded is “Wear and Tear” or any gradually operating cause.
The correct setting of your sum insured is crucial, to avoid Proportionate Underinsurance penalties applying at claim stage. Invariably, the sum insured must always represent the New Reinstatement/ Replacement cost of all the Contents and Plant and Machinery, inclusive of VAT and all costs like professional fees, demolition etc. An annual professional evaluation of this sum insured is prudent to ensure your sum insured is correct.
Get a Quote
