Business activity
- Owner-occupier or landlord
- Use per floor
- The tenant's activities
- Management by a third party
Use · rebuild value · change in the risk
Commercial buildings insurance (opstalverzekering): the importance of the correct described business activity
Every commercial buildings insurance policy states what happens in the building and who uses it. If practice differs from that, an insurer can reduce or refuse payment, however well the building is otherwise insured.
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Deze pagina in het Nederlands: De zakelijke opstalverzekering: het belang van de juiste hoedanigheid.
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- An adviser checks whether the cover suits your activities
- We arrange the switch, including cancellation
A premium indication, not personal advice. Prefer to talk it through? Call 072 - 509 24 56.
In brief
The business activity on a commercial buildings policy is the description of the use of the premises and of your role in relation to them: owner-occupier, landlord, manager, or a combination. Alongside it, the designated use is stated: office, shop, workshop, storage, hospitality or residential. Insurers set the premium and conditions on the basis of those two facts, including any prevention requirements as to fire compartmentation, electrics or security.
If anything about that use changes, the risk changes. An office building in which part is fitted out as a workshop with welding equipment, a storage unit where batteries are kept, or retail premises whose upper floor is let as living accommodation: those are changes in risk that you must report. If you do not, the duty of disclosure under Article 7:928 of the Dutch Civil Code and the insurer may reduce or refuse the payout under Article 7:930 of the Dutch Civil Code.
comes into play. sum insured is decisive as well. Buildings insurance works from the rebuild value: what it costs to build the same premises again in the same place, not what the premises fetch on the market. Anyone who insures for too little receives proportionately less when they claim. See also the general explanation of commercial buildings insurance.
What determines the cover?
Three items on the policy schedule together determine whether and how much is paid when you claim.
Sum insured
The rebuild value and the way it has been established.
- Rebuild value, not market value
- A valuation gives certainty about the amount
- Indexation against rising building costs
- Foundations sometimes insured separately
Perils covered
The events for which the building is insured.
- Fire, explosion, lightning strike
- Storm, rainfall and burglary damage
- Collision and falling trees
- Extended or comprehensive version
What is covered
| Situation | Basic | Extended |
|---|---|---|
| Fire damage to the business premises | Yes | Yes |
| Storm damage to the roof and facade | Yes | Yes |
| Damage from rainwater penetrating the building | Provided that | Yes |
| Loss of rent after a covered claim | Provided that | Yes |
| Damage from deferred maintenance or wear | No | No |
| Remediation of contaminated ground | No | No |
What is actually covered, including exclusions, the sum insured, the excess and prevention requirements, is set out in the policy conditions and the insurance card (verzekeringskaart) that you receive before you take out cover.
Where things go wrong in practice
Four points that determine whether your premises are actually paid for after a major loss.
A change of use is a change in the risk
Most disputes are not about the fire itself, but about what was going on in the building. A tenant moving from office to production use, the storage of plastics or batteries, a deep-fat fryer in premises insured as a shop: all of these are situations the insurer would have wanted to know about. Report every change in use or tenant in writing. Insurers often accept a change of use without difficulty, but in advance and sometimes subject to additional prevention requirements.
Rebuild value and underinsurance
Building costs have risen sharply in recent years. If your policy still shows an amount from years ago, the chance of underinsurance is real: claims are then paid proportionately, even small ones. A a valuation by an expert prevents that; such a valuation is an agreed value within the meaning of Article 7:960 of the Dutch Civil Code and gives certainty about the sum insured for an agreed period. Check as well that the index clause is actually being applied.
What is not included
Outside the cover are, among other things: damage caused by wear, deferred maintenance and design faults; groundwater, flooding from a primary flood defence and earthquake; soil contamination and clean-up costs, for which environmental damage insurance is needed; intent and wilful recklessness of the insured under Article 7:952 of the Dutch Civil Code; and fines and penalty payments imposed by the authorities. Similarly, business interruption and loss of rent are only covered if you insure them separately, and during prolonged vacancy cover often falls back to fire and storm.
Prevention requirements are part of the policy
For commercial premises the insurer often imposes requirements: a valid electrical inspection, fire extinguishers, certified burglary protection, or keeping escape routes and facades clear. Those requirements are not advice but a warranty or clause: if they have not been complied with when a loss occurs, that can cost you cover. Keep inspection reports and maintenance contracts and put the expiry dates in the diary, so that you can produce them when you claim.
What does your premium depend on?
- Designated purpose and use — hospitality and production weigh more heavily than offices
- Rebuild value — the usual basis for calculation
- Construction type — brick, timber or sandwich panels
- Level of prevention — inspection, security and extinguishers
- Type of cover chosen — basic, extended or all risks
- Vacancy and claims history — empty premises and previous claims raise the premium
Insurers weigh these details differently. That is why comparing pays off.
How we arrange it
- You request a quoteWe take stock of your situation, risk and wishes.
- We compareseveral insurers, on premium as well as conditions.
- You receive a proposalWith an explanation of the differences and the exclusions.
- We arrange the switchIncluding cancellation, so there is no gap in cover.
9.5New policy
9.8Claims handling
Customers rate our service on four aspects: personal service, service delivery, availability and the outcome. The reviews are collected and published by NH1816 and come from customers who have actually taken out a policy with Finass Advies B.V. or reported a claim.
Frequently asked questions
The questions we are asked most often about this.
What exactly are the described activities?
The description on the policy schedule of your role and the use of the premises: for example owner-landlord of an office building, or owner-occupier of a workshop. The insurer bases the premium and conditions on it. If reality falls outside that description, a claim can be declined without the cause itself being in question.
Do I have to report a change of tenant?
Yes, particularly where the new tenant is in a different line of business. From office to hospitality, or from storage to production, changes the fire risk materially. Reporting is also in your own interest: the insurer can then set additional prevention requirements that you can plan for in advance, instead of hearing after a loss that the risk was not insured.
Rebuild value or market value, which counts?
The rebuild value: the cost of building the same building again in the same place, including demolition, clearing debris and professional supervision. That can be higher or indeed lower than the market value. For listed buildings and unusual structures the two figures differ considerably, which makes a valuation all the more worthwhile.
What happens when the property is unoccupied?
Vacancy must be reported. Most insurers then restrict cover to a number of basic perils such as fire, storm and lightning, and impose conditions on supervision, draining down pipework and protection against squatting. Without notification you risk the insurer reducing payment because of an unreported change in the risk.
Does buildings insurance cover my contents as well?
No. Buildings insurance concerns the building and what is fixed to it. Machinery, stock, office furnishings and tenant's improvements are insured separately on a contents and goods policy. Where premises are let this is a classic borderline case: what the tenant has installed often falls under their own tenant's improvements cover, not under your buildings policy.
Read more
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- Compare commercial buildings insurance
Is your policy still right?
Request a quote without obligation; we test the described activities, the use and the rebuild value against the actual situation.
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About our service
Finass Verzekert is a trading name of Finass Advies B.V. We advise on and arrange non-life insurance on the basis of an objective analysis of several insurers, and receive commission for this from the insurer, which is included in the premium. You pay no separate advice fee. Before you take out cover, we establish your wishes and needs.
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This page was written and checked by an adviser at Finass Verzekert. Last updated on .
The information on this page is general in nature and is not personal advice.