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Property Damage and Business Interruption

Are you aware of the risks your production facilities and industrial assets are exposed to? We can help you to assess them, to implement the necessary preventive measures and to choose the insurance best suited to your needs: type of business, surface area, type and value of assets, prevention methods and related contracts (rent, subcontracting, leasing, etc.)

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Property Damage

The purpose of a property damage policy is to protect your business from the consequences of the following:

  • fire, explosion and lightning strike
  • water damage
  • theft and vandalism
  • glass breakage
  • natural catastrophes
  • windstorms, hail and snow
  • terrorism act and criminal attacks
  • riots and civil commotion
  • lvehicle impact
  • collapse
  • machinery and computer breakdown
Our recommendations

We recommend that you include an "All Risks Except" section in your policies, which will cover property damage due to causes other than those listed above, provided that they are not included in the list of exemptions.. Using this type of cover, we have, for example, successfully obtained payment from an insurer for extensive damage to roof insulation caused by birds.

 

Another important piece of advice is that you check the insurance clauses in your lease. The ideal situation is one in which the landlord insures the premises and the tenant insures the contents. Each party waives the right to make a claim against the other. Please note that you must also obtain this waiver from your respective insurers!

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Insurance clause

Receive our proposal for a standard insurance clause drafted by our experts

Business Interruption

In addition to direct property damage insurance, business interruption insurance allows your business to compensate for the resulting loss of gross margin and to continue to meet its fixed costs by covering ongoing overheads.

The aim is to return the business to its pre-loss financial position.

In the case of service companies, business interruption are generally replaced by additional operating costs to cover exceptional expenses incurred to keep the business going.

Our recommendations

Take care when determining the period of your cover. It usually ranges from 12 to 36 months and should correspond to the time needed to rebuild your production facilities after a major disaster. You must include in your estimate the administrative delay in the event of an investigation as well as the period necessary for the demolition or even decontamination of the affected site.

 

You should also be aware of the size of the Contractual Indemnity Limit (CIL) in your insurance policy. It corresponds to the maximum compensation that your insurer will pay for a single loss and must be equal to the value of the Maximum Possible Loss (MPL) increased business interruption and all costs.

Risk Prevention and Protection

Take care when determining the period of your cover. It usually ranges from 12 to 36 months and should correspond to the time needed to rebuild your production facilities after a major disaster. You must include in your estimate the administrative delay in the event of an investigation as well as the period necessary for the demolition or even decontamination of the affected site.

Insurers generally refer to theAPSAD rules and ask you to provide them with the corresponding certificates every year, the most common being:

– Q1 : Sprinkler

– Q4 : Extincteur

– Q5 : Robinet d’Incendie Armé (RIA)

 – Q7 : Détection Incendie

– Q18 : Installations électriques

– Q19 : Thermographie infrarouge

 

In addition to equipment, you must ensure that your sites are generally well maintained and to apply the following good practices:

  • Do not store your wooden pallets or waste at the side of the building
  • Provide an insulated and ventilated area for charging your electric trolleys
  • Respect the 'fire permit' rule when carrying out hot work
  • Make sure to cover the lights above the storage area to avoid the risk of a hot bulb falling out.
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Fire permits

When you have hot work carried out, respect the 'fire permit' rule. Submit your e-mail address if you wish to receive a copy.

Our recommendations

Preventive measures need to be applied rigorously on a daily basis, and this can naturally slacken over time. It is therefore vital that you establish rules and designate someone who will be responsible for overseeing them on a daily basis.

If you would like to discuss the specific requirements of your business with our specialists, please contact us here.