Guide to Contents Insurance for Businesses: Everything You Need To Know
The equipment in your workplace is the lifeblood of your company, essential to its day-to-day running and often worth thousands of pounds. In the event of a fire, flood or theft, the damage caused to these items could lead to serious financial and operational repercussions. But with contents insurance for businesses, there’s no need to fret about the future of your company, nor the cost of purchasing replacements.
What is contents insurance for businesses?
Contents insurance protects your company should its possessions and equipment be damaged or lost. It can be bought as a standalone cover, though it is sometimes included within general business insurance policies. Contents insurance typically covers items including:
- Fixtures and fittings, such as your flooring, lighting and kitchen appliances
- Furniture, including desks, chairs and filing cabinets
- Office equipment, like PCs, printers and telephones
- Manufacturing equipment and tools
- Staff or client possessions
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How does contents insurance work for businesses?
Most insurers generally offer contents insurance on a ‘new-for-old’ or ‘indemnity’ basis. The former means that the provider pays for a brand new item of equivalent value should it be damaged or stolen. With indemnity cover, they will take wear and tear on these items into account, and reduce the payout accordingly. As a result, new-for-old policies tend to be more expensive than indemnity policies, as the payouts are usually higher.
Is contents insurance compulsory for businesses?
Unlike covers like employer’s liability insurance, which is mandatory by law if you employ a team of staff, there is no obligation to have contents insurance in place. However, while you don’t need it legally, it’s highly recommended that you buy the cover for the reasons mentioned above.
Does contents insurance for businesses cover equipment on the go?
Generally speaking, contents insurance only covers equipment which remains inside a business’s premises. However, companies can also take out goods in transit, stock and tool insurance cover, which will ensure that important items are replaced quickly if they are damaged, lost or stolen outside of the workplace. For example, an employee might have a company laptop stolen from their car, or a third party could lose your stock while transporting it.
Is accidental damage included within contents insurance?
Accidental damage is defined as an isolated, unintentional incident that causes damage to your contents, like banging a nail through a pipe or spilling paint on your carpet. However, this isn’t usually included as part of a contents insurance policy, which tends to only cover damage caused by external forces like fires and floods. Consequently, you will have to pay extra to add this to your policy.
What else isn’t covered by contents insurance?
General wear and tear
Any damage resulting from general wear and tear cannot be claimed under contents insurance, such as worn carpets.
Theft by deception
You won’t be covered if somebody steals your contents through deception, such as giving your office keys to a plumber who takes something from your property.
Damage caused by computer viruses
Most providers won’t pay out on your contents cover to replace a PC or laptop if it has been rendered unusable because of a virus.
Damage or loss in an unoccupied property
Your business is unlikely to be covered if your premises have been left unoccupied for a period of 30 days or more.
Do I need contents insurance for a home-based business?
Absolutely. While home contents insurance will cover household items like your TV, jewellery and personal cash, insurers are unlikely to let you include business contents on the policy.
How much cover do I need?
Most providers offer a set total claim limit based on the size of your business’s property. That said, you might be able to increase this if your contents are especially valuable, and this can also be added if you buy an expensive item for your office while your policy is in place. The best way to know how much cover you need is simply to go work out how much it would cost to replace all of your contents. For your stock, however, you should take into account any periods where you may increase your orders, such as during the Christmas period, or in advance of promotions and sales.
What should I consider when buying contents insurance?
Check the policy terms
Be sure to carefully check the terms of a policy you’re considering to see if you’re covered on a ‘new-for-old’ or ‘indemnity’ basis, and what the cap is on payouts. You’ll need to make sure it covers you for extensive losses, like if your workplace was hit by a flood.
It’s always advisable to shop around when buying contents insurance, as this will give you a much better chance of finding the right deal for your company. Brisco Business enables you to compare offers from all of the UK’s top contents insurance providers in no time at all.
Get the right level of cover
Make sure you value your contents as accurately as possible, as you don’t want to end up under or over-insuring your business’s belongings. Enhance your risk management strategy by partnering with Brisco Business for all your business insurance needs.
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