Commercial insurance must include accidental damage which covers all accidents to property and people that occur by chance at work on commercial premises. This will form part of a commercial insurance package and sits alongside employer and public liability insurance.
Personal accident insurance relates to individuals and often results in compensation for damage or death caused to a person unintentionally. Negligence by an employer or contractor and other forms of deliberate personal injury are different because they are deliberate.
Therefore accidental damage insurance must be a central plank of any business, agricultural, residential or commercial insurance policy. Accidents can happen anywhere but running a business without commercial insurance may result in a year’s lost earnings or even bankruptcy if you own a hotel, car park, warehouse, factory or farm. This is because you can lose all of your assets, turnover, other revenue and reserves simultaneously.
Industrial Cleaning Company Charles Piton Ltd’s team of experienced cleaning technicians could be the first on the scene and a key player, documenting water damage or fire damage and providing a quote to your commercial insurance company.
As part of your commercial insurance, you need accidental damage cover
Without commercial insurance, you could face a bill that is several times your monthly turnover if your roof catches fire. It could destroy your fleet of cars. Read what happened to Snows BMW in this case study and how Charles Piton Ltd came to the rescue.
You may own a ten storey hotel by the sea that needs to be cleaned and prepared for painting in line with local bylaws every five years. As a successful businessman, you have put money aside to pay for the redecoration, the margins are tight but your forecasting is accurate.
Suddenly your wine cellar floods and spreads to the conference rooms, toilets and reception area. You have to close the hotel for an indeterminate period of time while you contract with and hire an industrial cleaning company.
Charles Piton Ltd’s team of experienced cleaning technicians will clean, repair and refurbish your flagship hotel and co-located business headquarters. You have lost all of your wine and your property may be damaged beyond repair.
Without commercial insurance, the cost of industrial cleaning and refurbishment will exceed your monthly turnover for six months, use up most of your reserves and you still need to pay your staff and other monthly expenses including industrial cleaning, security, planned works, running costs like administration and petrol.
If these scenarios sound bad, without commercial insurance, accidental damage can be even worse on a building site.
Accidental damage can occur during the construction of a new wing at your hotel in a storm in September when lightning strikes the metal beams knocking out the alignment. These beams form the fabric of the building which is listed.
After the storm, you find water penetration has ruined the carpets, rotted the wood and you need to call Charles Piton Ltd first to document and clean up the water damage. Your new hotel wing which is under construction is devastated.
You are faced with a huge plumbing bill for fixing leaking pipes and drying out your flooded basement. CPL can detect the leaks, extract the moisture and restore all possible fittings and fixtures, for example, furniture. The opening of the new hotel wing is also delayed.
But imagine if this is a multi-million-pound football stadium of a premiership football club. A stadium can operate at reduced capacity but for a team to be away from their football ground for multiple seasons has a significant negative effect on both revenue and performance.
Think of Brighton and Hove Albion Football Club who spent fourteen years at the very small, temporary Withdean Stadium. Poor facilities and restricted capacity held the club back with the manager battling plummeting morale among footballers and fans and loss of revenue.
However, since Brighton and Albion finally moved to the purpose-built Falmer Stadium, colloquially known as the Amex Stadium, the club has not looked back. It has now attained the dizzy heights of the Premiership with a capacity of 30,750 seats.
Late completion of large construction projects will result in a penalty. Finally, you lose even more revenue because you don’t have any customers and you were relying on their income without contingency planning for emergencies.
Your single mistake was not investing in comprehensive commercial insurance that covered accidental damage. You thought: I have a newly refurbished hotel and you renewed your existing commercial insurance policy without upgrading the accidental damage insurance to include construction.
Accidental damage insurance must be part of every comprehensive business insurance package – not just commercial insurance
Both the hotel and football stadium scenarios demonstrate that you need commercial insurance to cover every aspect of your business. Firstly your commercial insurance must include building insurance to protect you against structural damage. Secondly, you need contents insurance to cover all of the fittings and fixtures which is all the furniture in the bedrooms, reception rooms and conference rooms, any other stock, that is, the wine in this case.
However, in a hotel, you also need to insure yourself against accidental damage caused to people or by people, staff, guests, occasional customers and very importantly contractors and tradesmen. You cannot rely on tradesmen and contractors to have their own commercial insurance – their insurance will not cover a problem caused by you or anyone associated with your business, that is, any third party.
As a business owner, it’s your responsibility to protect you and all associates from a legal challenge. If you do not do this, you will be liable, so you also need indemnity insurance and public liability insurance. In a large hotel such as the Grand Hotel in Eastbourne, the footfall in the summer is significant.
But to return to football, imagine if you were insuring Brighton’s Falmer football stadium instead. You can have a state of the art stadium, the best security, the most rigorous business plan, a loyal and committed team of staff and excellent policing.
However, a contractor could have an accident and fall from a great height or a star footballer could cause accidental damage to a VIP in the front row by kicking the football into her face. Alternatively, a football fan could start a fight.
Above all, remember anyone can have an accident and it can happen when you least expect it.
Alternatively, you may work from home but customers may visit your home. In this example, you need commercial insurance as well as building and contents insurance. You may need insurance for your tools and van which must include accidental damage insurance to cover third parties.
You may be a freelancer who is peripatetic so you may work in other commercial offices. You will not be covered by their commercial insurance if you don’t have a written contract of employment. Or you may operate an online retail business.
In this second case, your commercial insurance must include cybersecurity to protect your IT systems from online, cyber-attacks as well as stock insurance to cover servers and IT equipment. For an IT company, a cyber-attack could be accidental damage if it was caused by a member of staff by mistake.
Only comprehensive commercial insurance including accidental damage insurance for any vehicles and single item insurance will be sufficient to protect you from legal challenge.
When it comes to insurance, over-estimate your cover and you will sleep soundly at night knowing everyone who is associated with your enterprise is safe and you take your responsibilities as an employer seriously.