Key takeaways
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A commercial combined policy bundles various business insurance covers under one comprehensive package policy
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Covers can be tailored to a wide range of industries and needs, particularly for those with commercial premises and for more complex risks
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What does commercial combined insurance cover?
There are a wide variety of commercial combined covers we go into further detail below. Which covers you decide to purchase under will depend on several factors. Even companies operating in the same sector are likely to have different business models, processes, machinery, staff numbers, and therefore insurance requirements.
Public Liability
Public liability insurance will protect your company against claims arising from injury or property damage of persons other than your employees (i.e., customers, suppliers, contractors or third persons) in the course of your business. Slips, trips and falls, falling objects, inhalation injuries, burns or scalds, dangerous pathways, glass injuries, door injuries, lift accidents, hazardous objects, whiplash injuries, crashes and collisions, and exposures to hazardous chemicals can give rise to significant compensation awards.
Property Damage
Otherwise known as material damage, will protect your company's buildings, equipment, stock and contents against loss or damage from a range of insured perils. Insured perils will typically include fire, theft, accidental damage, storm, flood, escape of water, impact, explosion and riot. For example, a burst pipe means that thousands of pounds of stock are damaged. Cover can provide the financial means to repurchase the stock and get the business up and running again.
Business Interruption
Provides security should the business be interrupted – filling the void left by property insurance which only protects the bricks, mortar, machinery, stock, and equipment of a business. While business interruption insurance will protect against the loss of income from being unable to trade because of an insured event. Covering the consequential loss of the interruption to trade by indemnifying against for the loss of income as a result of the insured peril.
Employers Liability
Employers' liability insurance will protect your company against claims arising from injury or illness of your employees. All employers have a duty of care to provide a safe working environment for their employees. If you fail and an employee is injured, or becomes ill, as a result of your negligence, you may be required to pay compensation. Employers' liability insurance will cover legal defence costs and compensation awarded by a court.
Products Liability
Any business involved in the manufacturing, distribution, sale, or supply of physical products should consider products liability insurance. It will protect your company against claims arising from injury or property damage as a result of a fault with a product you have provided. For example, manufacturing or selling an item with a defect which then injures someone or damages property, the cover will provide protection against the resulting compensation claim and legal costs.
Legal Expenses
Cover will assist your company with expert legal advice through a telephone legal advice service. In the event of a claim, the insurance can provide legal representation or unforeseen legal costs in a range of circumstances, typically relating to your property, employment, or contract disputes.
Deterioration of Stock
Deterioration of stock cover will protect against damage to property, being stock in any cold chamber, by deterioration or putrefaction in consequence of an insured event. The insurance will cover the insured value of such property.
Equipment Breakdown
Equipment breakdown cover will in the event of machinery and plant, owned or leased by the policyholder, suffers damage during the course of business.
Money
Money cover will protect against accidental loss, destruction or damage to money and non-negotiable instruments in a variety of defined situations. The insurance will indemnify the policyholder for such loss.
Loss of Licence
Loss of licence cover will protect against the licence for the sale of excisable liquors being forfeited, suspended or withdrawn. The insurance can provide cover for loss of gross income, depreciation in the value of the premises and expenses.
Terrorism
Terrorism cover will protect against loss from damage to property and potentially consequential loss resulting from acts of persons carrying out activities directed towards the overthrowing or influencing, by force or violence, of any government.
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What the benefits of Commercial Combined Insurance?
The key difference for packaging your covers under one business combined policy is flexibility, coverage and cost-efficiency. Standalone policies require separate contracts for each type of risk, often leading to gaps or overlapping coverage. Commercial combined insurance, on the other hand, offers comprehensive, tailored coverage that reduces administrative pain and may result in significant cost savings.
Coverage
One of the biggest advantages of commercial combined insurance is its ability to cover multiple risks under a single policy. This simplifies management and ensures companies aren’t left vulnerable to unexpected risks. Policies can then be tailored to specific needs, from large manufacturing companies to small retail outlets.
Administration
With a single renewal date, one premium to pay, and fewer policies to track, enterprises benefit from a more streamlined management process. One insurer can potentially meet your all your requirements with one business combined policy which includes a variety of different covers and can offer protection against a wide range of workplace risks.
Premium
Bundling multiple covers often results in premium discounts, making a commercial combined policy a more affordable solution compared to purchasing individual policies. Your projected turnover, number of employees and annual wage roll, in addition to the goods you are working with will be insurers most important considerations when calculating your premium cost.
Which industries is commercial combined insurance best designed for?
A wide range of industries will purchase a commercial combined policy including wholesalers, manufacturers, warehouses, factories, importers, exporters, outlets, and retailers.
Wholesalers
For example any wholesaler that holds and distributes goods in large quantities, will need to consider a range of property, business interruption, and product and public liability covers.
Warehouses
Anyone with warehouse facilities where raw materials or manufactured goods may be stored prior to their distribution will need to consider insuring against the loss or damage to the goods, in addition to liability covers.
Factories
For example any commercial enterprise that owns a building or group of buildings with facilities for the manufacture of goods will need to consider insuring those buildings, in addition to the potential liabilities and damage to the goods being produced.
Importers or exporters
Anyone that brings goods into the UK from abroad for sale, or that sends goods another country for sale, will need to consider both property and public and product liability insurance, in addition to marine cargo cover.
What property damage perils are covered?
The perils or contingencies covered are the normal range of special perils, such as:
- malicious damage, storm, tempest, flood, burst water pipes and impact
- Theft – depending on the risk, this may be full theft cover or limited to forcible and violent entry to or exit from the premises
- ‘All-risks’ cover, which is the preferred option these days – it effectively consists of the above perils together with accidental damage cover.
Optional covers are likely to include subsidence and terrorism.
These perils aim to protect buildings (including rent and property owners’ liability) and trade contents (including stock and materials in trade).
Specific exclusions
Specific exclusions to the property damage section of cover include:
- Terrorism (although as suggested previously, this cover can be bought back with certain insurers)
- Loss, destruction or damage to computer equipment due to programming/operator error, virus or hacking
- Wear and tear, gradual deterioration, defective design materials or workmanship or existing defects
- Mechanical or electrical breakdown
- Unexplained losses, fraud or dishonesty
- Theft involving the principal, partners, directors, employees or household members
- Escape of water, malicious damage and breakage of glass when the premises are permanently unoccupied
- Damage to moveable property in the open by theft, wind, rain, snow, sleet flood or dust
- Changes in the water table and frost damage
- Money losses due to clerical or accountancy error, or from unattended vehicles, or due to the fraud or dishonesty of an employee not discovered within seven working days
For more information or to discuss your business, arrange a call-back with one of our brokers
About the author
Simon Taylor is a respected senior industry professional and a Chartered Insurance Broker with over 20 years’ of experience in the commercial insurance sector as an underwriter, broker and director.