Rebuild value · valuation · prevention
Fire and business interruption insurance through Chubb
Fire and business interruption belong on one policy schedule, because the second begins where the first leaves off. The risk lies in the valuation: insuring for too little means a reduction under both sections.
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Deze pagina in het Nederlands: Brand- en bedrijfsschadeverzekering via Chubb.
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A premium indication, not personal advice. Prefer to talk it through? Call 072 - 509 24 56.
In brief
A combined fire and business interruption policy contains two sections side by side. The property damage section pays for the repair or rebuilding of the building, machinery, contents and stock. The business interruption section pays for what you lose in the meantime. One event affects both sections, while each works with a separate sum insured, a separate excess and separate exclusions. Finass compares several insurers independently and assesses such a policy on its conditions, not on the product name.
The basis of the property damage section is usually the rebuild value: what it costs to put the same building back on the same site. If you are not going to rebuild, or the premises stand empty and for sale, the lower sale value applies. For machinery and installations, replacement value as new or market value is used, depending on age. The starting point is that insurance must not produce a gain; that principle of indemnity is laid down in Article 7:960 of the Dutch Civil Code. A valuation agreed in advance prevents a later dispute about value.
Underinsurance works through twice here. If the value declared is too low, the payment is reduced proportionately, and because the business interruption cover rides on the same declaration, the same mistake affects both sections. Have the values reviewed periodically and watch the index. Machinery breakdown without fire falls outside this policy and calls for machinery breakdown cover; the general explanation of the interruption section is on the hub page on business interruption.
This page deals with one situation. The full overview is on Compare business interruption insurance.
What to look out for
Four provisions that determine the size of the payment on a fire loss.
Clauses on electrical installations and hot work
Insurers usually set requirements for the periodic inspection of electrical installations, for solar panels on the roof, for charging batteries and for work involving naked flame. Those are conditions of cover. If the inspection report is missing or a defect found has not been remedied, the insurer can limit the payment on a fire loss. Keep reports and evidence of repair with the policy.
Storage, waste and the load against the outside wall
Many fires start outside: containers, pallets or waste against the outside wall. Policies therefore contain a distance provision for storage around the building. The same logic applies inside, where the storage of flammable substances and compartmentation both count. If your storage situation changes, report it. It affects the provisions on change of risk in the Articles 7:928 and 7:930 of the Dutch Civil Code.
Natural catastrophe, war risks and terrorism
Excluded are earthquake and volcanic eruption, flooding through a breach of primary flood defences, war risks and nuclear reaction. Terrorism damage is not excluded entirely but runs through the reinsurance scheme of the Nederlandse Herverzekeringsmaatschappij voor Terrorismeschaden, with a capped payment per year across all affected policyholders together.
What the property damage section does not pay for
There is no cover for wear, corrosion and gradual effects, for an inherent defect in the damaged object itself, and for damage caused intentionally, which follows directly from Article 7:952 of the Dutch Civil Code. The costs of tracing a leak or a defect are often limited as well. Contamination of soil or water after a fire belongs on environmental damage insurance.
What does your premium depend on?
- Rebuild value of the building: including foundations and fixed installations
- Value of business contents and stock: with attention to seasonal peaks in stock
- Construction type and compartmentation: fire-resistant separations lower the maximum loss
- Detection and extinguishing in place: certified installations weigh heavily
- Activity in the premises: production, storage or office
- Output insured and the period: the interruption section follows the property damage section
Insurers weigh these details differently. That is where your saving is.
What is covered
| Situation | Property damage | Business interruption |
|---|---|---|
| A fire in the meter cupboard destroys the office wing and the files stored there | Yes | Yes |
| The turnover you lose for as long as rebuilding the premises takes | No | Yes |
| A storm lifts a roof sheet and the rain reaches the stock beneath it | Yes | Provided that |
| Your largest supplier burns down and your production is at a standstill for weeks | No | Provided that |
| A burglary in which tools and laptops disappear from the workshop | Provided that | No |
| A drive shaft on your production line breaks without any fire being involved | No | No |
Both columns rest on the same declared values, so a declaration that is too low reduces the payment on both sides at once.
Frequently asked questions
This is what people ask us most.
What is the advantage of a valuation agreed in advance?
A valuation by an expert fixes the value for a set period, so that no dispute about underinsurance arises when a loss occurs. That is particularly worthwhile for older premises, listed buildings and specialist installations, where the rebuild value is hard to estimate. Once the valuation's period of validity expires, you fall back on the ordinary way of setting the value.
I have solar panels on the roof. Does that change my policy?
Usually yes. Insurers ask about the number of panels, the inverters, the way they are mounted and the inspection, and set conditions accordingly. Panels can both cause a fire and make firefighting more difficult. Report an installation before it is fitted and have it recorded whether the panels fall under the buildings or the contents cover.
What about tenant's improvements if I rent the premises?
Improvements you have made as a tenant, such as a kitchenette, partition walls or floor finishes, do not fall under the owner's policy. You have to insure those yourself as tenant's improvements. Without that section, the owner repairs the shell and you pay for your own finishes, while the business interruption clock simply runs on.
When do I have to report fire damage?
Article 7:941 of the Dutch Civil Code requires you to report as soon as you are reasonably aware of the loss, so the same day. Report small incidents and near-fires as well, because they can prove relevant later. Report arson to the police and keep the damaged material until the loss adjuster has seen it; clearing up before the assessment makes the loss hard to substantiate.
Read more
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