Buying your own property is one of the biggest financial decisions a company makes – and an insurance turning point: what used to be the landlord's concern is now the company's. The building isn't "just another asset" – it has its own rules.
- The building's sum insured should match the rebuilding cost, not the purchase price or book value.
- When buying on credit, the bank expects property insurance and assignment – this is usually a condition of disbursement.
- The purchase is a natural moment to review the whole portfolio.
The building: a question of value
The most common mistake is underinsuring the building: the purchase price, the market value and the rebuilding cost are three different numbers. Insurance needs to match the last one – the amount it would take to rebuild the hall or office at today's prices. With underinsurance, the payout can be reduced proportionally, which hurts most exactly when the claim is large. That's why the value also needs updating from time to time – changes in construction costs alone can make a figure set a few years ago outdated: annual review.
The bank in the picture
For property bought with a loan or on leasing, the financier expects insurance, with assignment or an endorsement in its favour – this is normal practice, a condition of disbursement. A separate article covers the details: insurance alongside leasing and loans. Practical tip: get the bank's list of requirements before requesting quotes, so the cover is right the first time.
What comes with the building
Your own property also brings new cover questions: glazing, building services, possibly solar panels and a heat pump; at a larger site, the level of security (alarm, cameras) also affects the conditions of burglary cover. And since the building has become the company's biggest asset, it's worth soberly revisiting the question of downtime risk too – not taken out on reflex, but calculated.
The portfolio moment
With a change this big, the rest of the portfolio moves too: the site address changes (report it!), cover on the old leased premises needs closing off, and limits need re-planning around the new values. This is exactly the moment when a portfolio review is most useful: everything reorganised in one hand, in one table.
Want to go deeper?
This article is deliberately an overview: the detailed information – covers, exclusions, practical examples – lives on the area's own specialist site.
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