Page 44 - Commercial - Underwriting Mandates & Guidelines Binder

1.
GENERAL
2.
1.1 Due to the requirements instituted by bond holders it has become common practice to insure commercial properties under the Buildings Combined section rather than the Fire section, irrespective of the hazard represented by the occupation of the premises.
1.2 Keep in mind that the Buildings Combined section of the policy provides much wider cover compared to the Fire section, including, but not limited to:
• theft of internal fixtures and fittings (included in Building sum insured);
• limited accidental damage to fixed glass (up to R50 000);
• property owner's liability (up to R5 000 000);
• rent (30% of the Building sum insured).
1.3 This section also has an optional extension available for theft of external fixtures and fittings which includes theft of copper pipes, air-conditioning systems and gate and/or pool motors, up to a limit of R250 000.
1.4 It is therefore important to apply the correct rate, using the Fire rate as a base and adding a loading for the additional covers provided.
UNDERSTAND THE RISK
2.1 2.2 2.3
Business description
The occupancy or business activity is the main factor in determining the rate and other terms and conditions.
Risk location
Refer to point 2.2 under the Fire section.
This section covers:
2.3.1 Sub-section A – Property
2.3.1.1 The actual building, i.e. the structure;
2.3.1.2 no contents;
2.3.1.3 glass in terms of perils.
2.3.2 Sub-section B – Public supply connections
2.3.2.1 No sum insured required, fixed sum insured;
2.3.2.2 on the premises of the Insured;
2.3.2.3 no additional premium required as cover is automatically included in terms of the wording.
2.3.3 Sub-section C – Rent
Automatic cover based on 30% of the Property sum insured.
2.3.4 Sub-section D – Liability (Occurrence basis)
2.3.4.1 Policy automatically includes cover up to R5 000 000;
2.3.4.2 property owner's liability only attaches if the building is covered under this section.
Building construction
Refer to point 2.4 under the Fire section.
2.4
Buildings Combined
BUILDINGS COMBINED
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Commercial Underwriting Mandates and Guidelines – Binder – Version 4 2022