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Insure business assets

One of the worst calamities that can befall any business is losing its assets in a natural disaster only to find that it has been inadequately covered.

When this happens there is little that can be done, which is why it is worth taking steps to prevent it occurring in the first place. It has been known for companies to deliberately destroy their assets to benefit from insurance claims, consequently insurance providers are imposing heavier and heavier requirements on business to make sure they take proper care of their assets.

Therefore before taking out insurance on your business assets you should:

  • check out our insurance pages
  • First ensure that you are actually taking all precautions to prevent theft and accident. These will include security and anti-fire measures
  • Decide exactly what a business asset is. Many small businesses forget to do this and suffer accordingly so think carefully - is your mobile phone a business asset, old equipment stored in a shed somewhere, furnishings left over from a refurbishment - if losing a particular item means your business takes a loss then it is a business asset
  • Like all insurance bear in mind the cost, it is a business expense, but an expense all the same and the more comprehensive the cover the higher the premiums
  • Premiums will of course also be affected by the location and nature of your business

Searching for an insurer might take some time and you might be well advised to go to a broker. This is because you ideally want an insurer who specialises in your particular type of business and will understand the sort of risks to which your business assets are exposed.

When consulting your broker however you should:

  • Make sure you have a comprehensive valuation of your assets
  • Have a realistic goal of the premiums you will be able to carry - in difficult times as well as bad

Before deciding to take out cover however make sure you undertake the following action points:

Action Checklist

  • Read the documentation - look out for clauses on depreciation, replacing like with like etc, noting any exclusions or fault clauses
  • Note any requirements regarding security etc; sometimes the cost of taking these measures can be far higher than anticipated - particularly if you are located in a high risk area or operate a high risk business
  • Do not try to cut corners regarding any measures the insurer requires you to take. Courts can be merciless in rejecting claims by companies which fail to take the measures they promised to adopt when signing their policies
  • Understand the claims procedure. Make sure you have a clear understanding of how long it can take to settle claims, this may make an enormous difference if you need to keep trading losses down to a minimum
  • Ensure that the person you are dealing with understands the type of assets you are insuring. This will be important in terms of agreeing to evaluations