As independent shop owners, many of The Retail Mutual’s Members look to us to provide cover both for their business premises and their home. Issues relating to damage, theft and maintenance can have a serious impact on property owners and tenants alike so we have put together some handy hints and tips to help ensure your home and business are protected.
Who is responsible for insurance and maintenance?
In the case of rented property, the landlord will normally insure a property including its fixtures and fittings, although in rare cases they may pass this responsibility onto the tenant under the terms of the lease. It is the tenant’s responsibility to insure all the contents and moveable items (basically anything that would fall out if you turned the property upside down). Depending on the individual agreement with the landlord, the tenant may also be responsible for any improvements they make, such as installing fixed shelving, security fixtures etc.
Maintenance problems are generally the responsibility of the landlord, but in some cases the onus may be on the tenant to pay maintenance fees and keep the property in a good state of repair.
How much should you insure your property for?
Property owners, be they residential or commercial, sometimes base their insurance on the sale value of their property when in fact they only need to base it on the rebuild value. This is because should you suffer a complete loss you will still have the land on which the property was built. This land value is included in the sale value of a property but is not needed for insurance purposes.
You can find the rebuild value of the property in the survey that was undertaken when the property was purchased, but do bear in mind inflation over the years since the purchase took place. For any sizeable building we would always recommend you enlist the services of a professional surveyor to value the property.
Things to bear in mind when insuring your property
- Check that your cover limits are accurate. If you do not have sufficient cover you may not get paid in full in the event of a claim, or your claim may even be refused.
- Secure your property and know your locks. Most insurers will require doors to have 5-lever mortice locks in place.
- Check the terms of your cover carefully to see if there are any requirements to have a certain type of alarm or regular maintenance/servicing requirements. Simply disclosing your alarm type doesn’t necessarily mean you have theft cover.
- Take the time to understand your cover. What do you need and what don’t you need? What else might you need to pay for, such as Insurance Premium Tax (IPT), interest on instalments, broker fees, replacement documents, cancellation charges, making changes to your cover etc.?
- The cheapest option can be the most expensive choice, so don’t wait until you suffer a loss to find out you’re not adequately covered.
Property claims trends
A common property claim is for damage caused by escape of water as a result of frozen pipes. It is easy to mitigate against this with a little planning and preparation. Ensure that your pipes are well insulated and open your loft hatch to ventilate the property. If the property is due to be left unattended for more than a day it is a good idea to keep the central heating on at a minimum of 15C (59F) if there is a possibility of outside temperatures dropping below freezing. Faulty pipes and badly maintained flat roofs can also be the cause of property damage, so do ensure they are checked regularly and keep up-to-date reports.
Fire damage tends to be the most devastating for property owners, with poor maintenance, portable heating, electrical faults and waste kept close to the property all cited as common reasons for fire claims. For larger properties you can mitigate against fire damage by using dry risers, sprinklers, and correct smoke detectors, as well as installing fire walls and concrete floors. Aim to always keep skips at least five metres from your property, and ensure smoking only takes place in designated smoking areas. Make sure regular electrical inspections are carried out and turn off chargers and appliances when they are not in use.
Unfortunately theft continues to be an issue for shop owners, sometimes resulting in damage to the property as well as the loss of stock. As stated above, the landlord is usually responsible for insuring the building but do check the terms of your lease carefully to ensure you are covered. Making sure money is locked away at the end of a shift, along with any surplus stock, can help to mitigate against theft. Always empty the till and leave it open to show that there is nothing inside to steal.