When is the right time for business owners to start thinking about insurance?

The insurance monitors the activities of the owners of business premises from the very beginning, from the construction of the facilities. Since, as a rule, these are large investment projects, any unexpected circumstance during the construction process can lead to significant financial losses. Insurance of facilities under construction from all risks has become a standard in construction and often the contractors themselves take on this obligation, but for investors it is certainly not enough. Namely, any major damage to the works can delay the start of commercialization of the facility, and thus cause certain financial losses. In case of delay in the completion of works, this insurance enables the Insurer to assume the obligation to pay the expected profit from the contracted business of renting business premises and to reduce the losses of investors to the minimum.

Is there any other insurance intended only for investors in construction works? In your experience, what were the most common damages that investors suffered during the construction period?

All obligations, including insurance obligations, are defined by local legal regulations and apply to both investors and other actors in the field of spatial planning, use of construction land and construction of facilities. Investors should pay special attention to contracting liability insurance for damages caused to third parties, which is where most of the claims come from. Construction in urban parts of the city, proximity to surrounding buildings, high frequency of passers-by and vehicles, are the main causes of compensation claims that are usually sent to the investor. Their amounts vary depending on whether it is only compensation for material damage or compensation for bodily injuries. These requirements have an extremely growing trend in both frequency and amount, so our advice is not to contract liability coverage with a limit below EUR 500,000.

Do you advise contracting liability insurance during the lease of business premises and what damages are covered then?

Business premises owners are liable to their tenants, their visitors and to all other third parties who may suffer certain damage. Failure of technical installations, inability to access offices, power outages, are just some of the examples that can make tenants a business interruption for which the owner of the space can be held responsible. Every adaptation of the space for a new tenant, every engaged alpinist in the facade washing work, every business celebration with a large number of guests, every advertisement on the roof of the building, every totem or mast in front of the building, represent a potential source of danger that can harm third parties. liability insurance policy.

What other dangers are insured? What are the latest trends in business insurance?

The list of dangers that can be the subject of insurance is long and the owners of facilities are increasingly opting for the so-called package. insurance against all risks. Undoubtedly the most important risks are fire, storm, hail, flood and earthquake due to their far-reaching consequences that are eliminated over a long period of time. However, small-scale damages also create discomfort for building owners due to their higher frequency, so choosing the option of insuring against all risks is the most elegant solution. Contracting to cover the loss of rent in the event of damage or destruction of business premises, or to cover increased operating costs in the event of relocation of tenants to another location, has also become standard. Owners of business premises are increasingly interested in covering the damage caused by terrorist activities, especially if the premises are located in attractive or visited locations, near state-owned buildings or next to state symbols.

At the same time, it is important that the owners of business premises protect themselves from possible damages that tenants can cause them. It is not uncommon for tenants to be required to contract for liability for damages caused to the owner. The activities of the tenants, their works on arranging the business premises, their employees and visitors, can cause the owner both material damage to the facility and financial damage due to the inability to generate income.

Did the absence of employees from business premises during the Covid 19 virus epidemic reduce or increase the risks insured?

The high frequency of people in the business premises is certainly a source of danger. Namely, in such circumstances, there is a greater possibility of injury, there is a higher probability of damage to facilities in everyday work, a higher load on the installation of facilities and failures are more frequent. But the good side of the inhabited building is that the damage is immediately noticed and therefore its consequences are less. In an empty building, leakage from the installation may not be noticed for days, ie until the damage becomes large and demanding for repair. 

In short, during the epidemic and mass work outside the business premises, the frequency of damages decreased significantly, but their individual amounts increased. It is the responsibility of insurers to suggest to their clients, business premises owners, the best insurance model, taking into account the current circumstances, to be flexible and innovative in insurance solutions.

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Additional information on these and other types of insurance can be found on the Wiener Städtische osiguranje website https://wiener.co.rs/za-privredu/. You can send requests for offers to [email protected]