What is Office Insurance?
An office has three important aspects that any good insurance policy should keep at its heart.
Your premises and equipment (buildings and contents insurance)
Your staff and customers (public and employer’s liability insurance)
Protection of outgoing costs should you have to stop trading for a period of time (business interruption insurance)
Get these things in place and everything else comes down to the specifics of your business, your preference and of course your budget.
Do I need Office Insurance?
Office insurance is primarily focused on businesses that are run from a commercial property. Specialist policies are designed to account for the risks of your specific industry. The basic types of cover we talked about above are standard and/or legal requirements across all offices. They all have a premises, products or services and customers. This makes building the basics of your policy quite straight forward. Having said this, no two offices are the same. Understanding your specific risks and tailoring a policy to meet those is the job of a specialist insurer, and vital for your piece of mind. At the bottom of this guide you can also browse our related products section if you are unsure where you fall.
Public liability limits are usually set around 2million for commercial use policies.
Office Insurance Features Explained
Public Liability – This is to protect you and your customers. As the owner you are responsible for making your office as risk free as possible but accidents inevitably happen. Public liability insurance will cover loss, damage or injury to a third party on your premises. For example – if a customer were to fall and injury themselves whilst visiting your office, your PL cover would pay out if a law suit were to arise.
Did you Know? You should have employer’s liability even for volunteers or freelance workers.
Employer’s Liability – The legal minimum cover is £5m. Employers’ liability insurance guarantees you have access to adequate funds should you need to compensate a member of your staff for an injury or damage from a situation you, as their employer, are liable for.
Office Buildings Insurance - Buildings insurance is only necessary if you own the property and want to insure as part of your complete business insurance. Otherwise the landlord/property owner will have the buildings insured on their own commercial property insurance policy.
That doesn’t mean that improvements you make will automatically be insured on your landlord’s cover. If you install a new kitchen, meeting room or something similar during your tenancy, this should be added to your insurance. As this is paid for and owned by you and so the insuring will be your responsibility.
‘Increased cost of working’ cover – What if you could simply pick up and move property and carry on working as if nothing happened, instead of claiming for business interruption while your building is rebuilt? It’s not for every business but read our explanation of how ‘increased cost of working’ cover could work for you.
Business interruption - If your property becomes ruined your business interruption protection will cover you to continue paying your rent, overheads, wages and other expenses that you need in order to keep your business alive while the problems are resolved. Indemnity Period – Your period of indemnity is the length of time you can claim for business interruption costs.
Office Contents Insurance - Imagine you turn your office upside down. Anything that isn’t attached and hits the ceiling as it falls is considered your ‘contents’. Anything that stays attached is considered ‘buildings’. Sinks, windows, light fittings etc. are therefore part of the building insurance. Desk, computers and cabinets are ‘contents’. If you rent the property your landlord will have their own policy covering the contents that belong to them.
Office Insurance Optional Cover
Office Insurance Exclusions
Accidental damage – This cover allows you to claim for damages not caused by any other policy features such as fire, theft, flood etc. It doesn’t always come as standard though so if you want accidental cover to be included in your policy make sure you let your adviser know early on to help them source you the best policy. As with any insurance policy there will be some exclusions. Make sure you read your policy documents thoroughly to understand what you are responsible for and what is the responsibility of your insurance company. Insurers want to protect themselves from claims for things that are inevitable such as wear and tear but you must also be happy they are agreeing to cover the things that are important for you.
Theft by violent/forced entry – This is an optional cover that protects against theft and break-ins via a forced entry. Insurers generally won’t cover you for a theft that occurs through an unlocked door and will stipulate what security measures you need to have in place before you can be covered. This will extended to public entrances, back doors, windows, out buildings, delivery hatches and service entrances. Make sure you are aware of what the security requirements are for your policy.
Manual work away exclusion – An office is defined as a business based out of a specific type of commercial premises – your office. A policy is usually designed to cover you for the business you do there and extended to cover you for collection and delivery outside this property. Take for example a hotel bookings service company. The business is run from a normal office but some of the profit and business may come from installation and training on booking software on the customer’s property. The manual work away exclusion states that this type of business needs extra cover, simply because it faces a different type of risk. If the balance tips towards the external work you may even be advised to switch to a ‘commercial combined’ insurance policy which is better suited your business model. An experienced advisor can talk through this with you and explain the benefits of both.
Things to consider
Especially in these times, every penny counts. We doubt we could find one small business owner that isn’t concerned with getting the best insurance for a fair price.
The key to finding these mythical policies is to speak to an advisor that knows both the insurance industry and your own industry. Having the knowledge and experience in specialist insurance areas is only half the battle, knowing the concerns and risks that affect your own business, and understanding what you really need is vital to getting the best product.
Especially when no office is the same. You may have an unusual property build, or have free-lance workers, use specialist equipment or do some of your trading outside the office! In any case you want an expert helping you tailor a policy that doesn’t charge for the things you don’t need but equally provides the right cover for your specific business.