Definition of premises
An example of how challenging it is to ensure that your business insurance is “fit for purpose” and suitable for your needs was flagged up the other day to me. It all hinges around the definition of your Premises. There is no standardised definition in policy wordings of this word and this, in turn can cause problems. I think most people would imagine that this would refer to the buildings and outbuildings at their business location.
However, taking just 3 sample policy wordings, (literally the first 3 I checked), they all have different definitions of Premises:
Allianz Combined - The address as stated in the schedule
Aviva Combined - The premises stated in the schedule
QBE Combined - Premises means the buildings and land shown in the schedule being occupied by you for the purpose of the business.
All three insurers, upon questioning, would include the surrounding land and perimeter within their definitions.
Take, for example, a policy which warrants the policyholder removes waste from the premises each day and stores this outside pending regular collection and disposal. One would have expected this was fairly clear and unambiguous?
With any of the above insurers, you would need to remove the waste not only from your building, but also off site entirely at the end of each day to comply. If you had a fire and the waste in the yard contributed to this, you would be in danger of not being insured due to breach of warranty.
This just serves to demonstrate the layers of complexity involved in your insurance policy. Its not just a case of insuring against certain perils, and ensuring that you are complying with any warranties and conditions, but forensically examining each and every word and definition.
Now tell me that you don’t need a professional broker to guide you through the potential minefield?!