Commercial Insurance – the basics: Property Insurance

Property insurance is one of the simplest types of cover available. It isn't a legal requirement, but it’s a sensible purchase — and can often be arranged alongside other covers (such as liability or money) as part of a package.

Sometimes, this cover is also referred to as Material Damage or Property Damage insurance.

What Can Be Insured?

Almost any kind of property can be insured under this type of policy. However, for most standard products, common covers include:

• Buildings

• Contents

• Money

• Personal possessions away from home

• Business equipment away from the office

What Is the Purpose of Property Insurance?

Property insurance provides a promise to either:

• Reinstate your property to the condition it was in before the loss or damage occurred, or

• Provide an indemnity — a cash payment equal to the value of the property that’s been damaged or lost.

Reinstatement means your property will be repaired or rebuilt.
Indemnity means you’ll receive a sum of money to cover the value of what was lost.

Avoiding Underinsurance

One of the main reasons property claims are not settled to the satisfaction of policyholders is underinsurance.

To avoid this, make sure you know the reinstatement value of your property if this is the basis of cover.

For example, the reinstatement cost should include:

• The rebuild cost

• Debris removal or site clearance

• Professional fees (such as architects or surveyors)

If you are underinsured, you won’t receive a full claim settlement — so it’s crucial to have an accurate valuation.

Information Your Broker Will Need

When seeking a property insurance quotation, it helps to have the following information ready:

• The address and reinstatement cost of the property at risk

• Your loss history, including previous flooding or subsidence issues

• The physical security at your premises (alarms, locks, etc.) and fire precautions (smoke alarms, fire alarms, sprinklers)

• The age and construction of the property, including whether it is listed

Depending on your answers, your broker or underwriter may ask for further details — but this list is a great starting point.

Need Help?

We specialise in helping organisations arrange commercial and charity insurance policies.

Get in touch
if you’d like to talk to us about your commercial property insurance or your personal property insurance needs.

For more information about how to buy insurance, you can also download our Buyers’ Guide.