At Assetsure, we offer insurance quotes for commercial buildings. However if the commercial building you require insurance for has a listed status, we would review each risk on a case-by-case basis. Generally speaking we have more success in obtaining insurance quotes for Grade2 listed commercial buildings than Grade 1.
This is a fairly typical position of most UK insurance companies. There is a genuine need to assess the individual risks associated with the building type, it’s usage, and implications of being a listed building. So if you’re considering buying a business freehold with a commercial building that has listed status, you need to be aware of the implications regarding arranging adequate insurance cover and it is always prudent to make enquiries with regard to the cost of insurance prior to exchanging contracts. Premiums are typically higher that modern commercial buildings that do not have listed status. The insurance company will require to have full details of the listing along with the construction materials employed in the property to provide an accurate quotation. Full details of the trade of the tenant, the trade processes and materials/goods stored in the building will also be required.
A listed building is one that is noted on the Secretary of States register, as being of special interest. At Assetsure we recognise that there are a whole range of different types of listed buildings which you may need cover for. There are also other factors which may increase or decrease insurance premium, (such as the postcode where the commercial listed building is located). Apart from the fact the property is listed, the factors that affect the rating are similar to those used on a non listed commercial building.
Having a grade listed classification protects the building from any specific alterations. The grade status is a legislative classification. In principle owners must preserve the original structure, so that over time the heritage and tradition that the building reflects is not lost. It helps stop short term property development and alteration for commercial gain. Listed buildings are quite simply part of our National Heritage, and are protected by laws prohibiting short-term exploitation for profit. Failure to comply with the laws surrounding listed buildings can result in severe penalties. As such, owners of listed buildings, seeking to use a property for commercial purposes, can find that there are many restrictions on adapting it’s usage for, or making physical alterations to the interior or exterior structure, without permission. Before any alterations are undertaken, professional assistance should be sought to ascertain the legality and feasibility of any alteration to suit the required usage.
Commercial Listed Buildings, Insurance issues.
Most commercial building insurance companies are naturally cautious when it comes to providing buildings insurance, for what is typically a very old and precious building. Insures know, that because of the listed status, following a claim repairs may not be as straight forward as with a standard non listed commercial building. The listed status may mean that the rebuilding processes and techniques are often non-standard and must adhere to strict guidelines. This in itself may mean delays in planning procedures and approvals processes should a disaster occur. It makes accurate valuation for the rebuild purposes more complicated and any delay in the settling of a claim normally means that the cost of the claim increases.
Despite the seemingly complicated drawbacks, many businesses successfully operate within listed building, and require both standard buildings and landlords contents insurance, while most also require public liability insurance ( should members of the public visit the property). This is fairly typical in the travel and tourism sector, where many old barns, thatched buildings and timber framed cottages are converted into bed and breakfast accommodation, tea rooms, small museums, art galleries and even restaurants. The great British public love visiting old English tourist destinations, where the character of the building is worth a visit in itself. Consequently listed status helps to preserve and protect the buildings which many people love to visit on their holidays.
One of the most difficult areas to obtain adequate commercial building insurance are those for which start thatched. Any business based inside a thatched listed building, which manufacturers or works with flammable raw materials, will usually struggle to obtain a wide choice of insurance quotes. Insurers also place a higher risk weighting where the probability of fire, flood or theft would result in damage to a listed building; and subsequent highly specialised expensive repairs all rebuilding costs. At the present moment, we are unable to obtain quotations for any thatched commercial buildings.
Many listed buildings in the UK are not deemed to be of ‘standard construction’.. Insurers pay close attention to how a building has been constructed as it can effect the premium rating. Insurance companies classify a building as being of standard construction when it is made from bricks or stone and roofed with metal or slates or tiles. Many commercial listed buildings have been constructed using ancient and historical building techniques and materials, some are even timber framed or thatched with wooden roofs and a mixture of timber and handmade bricks. Obtaining a full description of the build of a property is essential to obtaining a quotation.
Sometimes private residential buildings can be converted into a commercial business, following strict planning approvals from the local authority. These place highly restrictive conditions upon the freeholder, not to alter the fabric of the building in any way, without prior permission. Since the typical conversion process might be the freeholder wishes to convert the lower half of their residential dwelling, into a retail outlet. This will be much more difficult than the modern retail units with fronted glass. You may find it impossible to remove windows, add a commercial nameplate fascia or alter major elements of the interior for customers to use. Insurers will need to know the exact way in which the commercial building operates, how it has been altered and if there are split usages between a private dwelling above, and a trading business below. As most commercial buildings that are also listed, tend to be retail or tourism orientated, it’s a good idea to visit the various listed building association websites, to understand the latest laws relating to change of usage and difficulties with finding adequate insurance for split usages.