Commercial Package insurance

Commercial Package Insurance

Commercial Insurance Package is mainly aimed at simpler, though not necessarily smaller, property-based risks such as insurance for shops, offices, restaurants/takeaways, pubs, hotels, doctors/dentists & the like although a few insurers have introduced a similar product for smaller Commercial Combined-type risks.

As its name would suggest a range of standard covers are packaged together typically including Material Damage, Business Interruption, Business Money, Glass, Employers’/Public/Products Liability & Goods in Transit. Some insurers may allow you to alter the Public & Products Liability indemnity limit but in general the only variable is the Material Damage section which is a compulsory section. Rather than a separate rate being applied to each ‘head of cover’ (Material Damage, Business Interruption etc) a single rate is applied to the Buildings &/or Contents sums insured. The other covers are then thrown in free of charge (they aren’t really of course, the combined rate applied to the Material Damage sums insured contains an element for each of the other covers). This type of policy is ideal for the smaller business & the minimum premiums are very low. Most such policies are now processed online reasonably quickly, the downsides being that the contracts are not very flexible – you can’t delete any of the covers that you don’t want – & the risk must fit in the proverbial pigeon hole. Any manufacturing taking place on the premises, sub-letting or sharing premises, exports to North America or ‘manual’ work away from the premises (other than collection or delivery) may mean that a risk doesn’t qualify for package insurance & cover must be arranged via a traditional Commercial Combined policy.

You must insure Contents & typically ‘All Risks’ cover will apply. There is the option of including Buildings or Landlords Fixtures & Fittings/Tenants Improvements. Some insurers offer optional covers such as Trade All Risks (cover on business equipment taken outside the property such as lap-tops & phones/tablets, doctors’/vets’ bags etc) & Legal Expenses.

Package policies are generally all very similar though there may be variations in the limits for Business Interruption, Money, Public/Products Liability etc. The excesses applicable can also vary though tend to be between £100 & £350 for most policies. Increased excesses can apply for Escape of Water/Oil, Flood (if considered to be in a high risk area) & Subsidence.

All insurers will require a minimum standard of security, typically 5 lever mortise deadlocks (that conform to British Standard BS3621) on external doors, other than designated fire escapes, & key-operated locks or substantial metal bars on any accessible opening windows. The security requirements can be increased for certain high risks businesses such as jewelers or chemists & may involve the fitting of external security grilles & intruder alarm systems or CCTV. There is normally a requirement for at least 1 powder or CO2 fire extinguisher to be on the premises & as with all commercial properties the fixed electrical wiring must be inspected & certified by a suitably qualified person at least once every 5 years.

With regard to takeaways, pubs, restaurants & hotels insurers will need to know if any frying is carried out on the premises. Different terms are applied for shallow frying & deep fat frying, either in a table-top ‘basket fryer’ or in a chip shop-type range.