Property Insurance

For most in the sign industry your business will include the use of premises whether rented or owned by the business. Insurance is an essential part of your business, without it even a simple claim could have serious consequences.

Insuring your business and its contents can be quite straight forward, and as a specialist broker to the Sign & Graphics sector we can advise along the way as to the best ways to insure your business and its assets.

What needs insuring?

Your business contents:

The sum insured depends entirely on the replacement ‘as new’ value of your machinery, fixtures and fittings and all other contents at your premises. It’s easy to take a guess at this figure but we strongly advise against this. What we do advise, is a breakdown of the contents as a whole. By following this simple exercise you might be surprised the figure you were thinking of is a lot lower than it should actually be. Getting this part right is essential should a loss occur at your premises.

Before breaking down your property sums insured, we highly recommend that you read the next section.

Machinery & Plant – this would include such items as Printers / Wide Format Printers / Routers / Plotters / Laminators/ Engraving Machinery / Racking / Benches / Fork Lift / Pallet Trucks and all other machinery within your premises.

One interesting point to be noted is where you run your machines with 3phase, don’t forget to include the reinstatement of the cabling.

Fixtures & Fittings – include all items such as carpets / desks /chairs / filing cabinets / freestanding cupboards etc

Portable Hand Tools – this will include all your portable drills, sanders, routers, heat guns etc

Mezzanine Floors – We always make a point of specifying these items as they are potentially removable and are also very easily forgotten about. Generally, these are included under the tenants improvements section.

Tenants Improvements – it’s exactly what it says. Where you are a tenant there are certain things you may do to the premises that are not part of the original structure. eg your unit has four walls and a toilet in the corner, you add an office, this is a tenants improvement and the replacement cost of the office is the sum insured for this section.

Computers – this can be split into three areas. Computers, Software and computers away from premises including laptops and iPads. Computers at premises sum insured should include PC’s, software and dongles, cost to replace as new. Premises computers should include all PC’s, Mac’s, servers ancillary items such as routing equipment, switches and the like. Don’t forget the cabling to go with it where you are hard wired.

Computers away from the premises are likely to be laptops and tablets, all you need to decide is the area in which you want them to be covered, UK, Europe, Worldwide?

Software – This is usually a forgotten item, you need to include all additional software used for designing etc and particularly where you have dongles – don’t forget the replacement of those too.

Stock – stock consists of various items, raw material, work in progress and finished signs waiting to go out, just lump these altogether in one sum insured. You should also take into account any items you may have which you don’t own, this may be work being carried out on something belonging to a customer, also if you have stock at other premises you must ensure that this location is stated separately.

Customers vehicles – if you apply graphics to vehicles then it is likely you will have them inside your premises or perhaps in a compound. We know that for many sign companies who apply vehicle signage it’s very likely that your customer’s vehicle could remain with you overnight.

Own Vehicles – where we cover your own vehicles for use on the road under our road risks policy, these need to be covered whilst at your premises as well. The sum insured applied here is the market value of your vehicle(s) and the maximum value of vehicles at your premises at any one time whether in the daytime or at night.

Underinsurance & average condition

Firstly and the most important aspect is that almost all policies carry something called an “Average Condition”. First and foremost the most important point to remember is that the basis of valuation of business assets should be done as “replacement as new” to carry out the same function without betterment.

Conditions of Average
or Underinsurance

Many policies include the condition of “Average” by which Insurers seek to counteract under-insurance. The condition makes you responsible for the percentage of the loss proportionate to the degree of under-insurance.
For insurance on an Indemnity basis, if, in the event of a claim, under-insurance is found to exist, settlement is based on that proportion of the loss that the Sum Insured bears to the actual value of the property at the time of the loss, taking into account depreciation, wear and tear.

Where insurance is on a Reinstatement basis, average applies where the Sum Insured at the time of the loss is less than 85% of the cost of reinstating the whole of the property at the time of reinstatement. This 85% ruling is an attempt by Insurers to alleviate the effect of inflation.

Where Insurance is on a Day One basis, settlement is based on that proportion of the loss that the “declared value” at most recent renewal date bears to the cost of reinstating the whole of the property at the time of reinstatement.

Thus, to avoid being penalised it is essential that Sums Insured are maintained at an adequate level.

It should also be noted that any policy excess or deductible applicable to a claim will be deducted from the settlement AFTER the application of “Average”.