Property insurance is as important as any other form of insurance like motor insurance even though it is not compulsory. The latter might seem more vulnerable to theft or damage in accidents, but what many fail to understand is that property is worth much more and can be affected by many factors, some of which might be out of human control.
What if there is an earthquake? What if your property gets damaged due to another nearby property? What if there is a fire which ends up destroying most of the essential equipment and stocks? Imagine the big losses that you could face. Even spending fortunes may not be able to recover the entire loss. Incidences like there make you realize how important property insurance can be.
The main categories of items that fall under property insurance include machinery, warehouse/buildings, fixtures, fittings and furniture, electronic equipment, rent and profit.
Stock or warehouse catches fire? Machinery breaks down? You would not want these problems to aggravate into major obstacles in your production process, would you? Even a small delay in delivery could lead to empty shelves at outlets for your goods and big losses for your business. So property insurance is the best way to protect you from a bleak situation.
There are different levels of insurance and you can choose the one which suits you requirements and you feel is the best for you. Starting with the basic most, they different levels are:
- Fire plus lightning
- Fire , allied perils and burglary
- Property All risks (Includes the above as well as covers accidental risks)
There are different types of coverage to insure your property. One is the replacement cost coverage which is often useful as it follows the principle of indemnity, where the client receives the amount at which the property originally cost and does not take into account appreciation or depreciation. The purpose is to return you to your original position prior to the time of loss. Other is the actual cost coverage which takes into account the depreciation charges such that the value of the property item into consideration is adjusted according to its age and usage.
As a client, it is often useful to know about the named peril policy and the open peril policy. Named perils, as the term suggests, includes coverage on only those losses which are explicitly mentioned in the policy itself. Open peril policy, on the other hand, provides protection against events not explicit in the policy and commonly includes losses from natural hazards.
Rent and profit:
If you are a landlord, you may suffer if an unforeseen hazard like a firm may deem a property unfit for occupation. Once insured, the loss of rent can be paid out to the landlord.
Loss of profit insurance or consequential insurance gives coverage to clients in the sense that if a business suffers a loss due to property damage, then the insurance company is liable to support the respective business by paying it the sum insured which, in this case, is the insured gross profit. The insurance company will continue to support the business till the agreed term (maximum indemnity period). As a business, you would surely want to benefit from such a policy since it protects your business at crucial times.
Are you a UAE-based business? If so you would certainly have some assets to insure – your office contents, fixtures, fittings, computers and other equipment, stock, rent, machinery and more. Your account manager from insurancemarket.ae can tailor the right solution for you. If you’re an SME you can probably have a comprehensive package that not only covers property but also other risks like premises liability, workmen’s compensation, employee dishonesty etc. And usually property insurance isn’t as expensive as one may think it’d be – get a quote now and see for yourself.