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Property damage insurance
In the business world, unforeseen events can arise at any time, transcending sectoral boundaries. In this context, the need to protect against these risks becomes crucial.
In short
What is property damage insurance
Property damage insurance covers the company's physical assets —building, machinery, stock, and facilities— against fire, water, theft, weather events, and breakdown. Its essential complement is business interruption, which compensates for the margin the company fails to earn while it cannot produce. Without this second cover, a company can rebuild its premises and still close due to lack of cash flow during the downtime.
Advantages
Advantages of property damage insurance
Asset cover protects the balance sheet; profit cover ensures the company continues to exist.
Cash flow does not stop with production
Loss of profits pays salaries, rents, and financing while no invoicing occurs. It is the difference between a hard stop and a definitive closure.
Rebuild without decapitalising
Compensation at replacement value avoids having to finance the difference with expensive debt just when the bank sees you as a high risk.
Better premium for investing in protection
Sprinklers, detection, and compartmentalisation translate into premium reduction year after year. The investment in safety also pays off in this way.
Reassure your financiers
Financial entities and landlords require proof of sufficient cover on affected assets. A well-dimensioned programme unlocks investment operations.
Profile
Who we work for
Industry and manufacturing
Plants with critical machinery whose replacement has long lead times and no immediate alternative.
Logistics and warehousing
Warehouses with high value concentration in stock and seasonal stock variation.
Retail and distribution
Networks with multiple locations where the risk is dispersed but continuity depends on the logistics centre.
Corporate property
Property companies and landlords responsible for the building and loss of rental income.
Technical criteria
What we discover when reviewing industrial policies
Underinsurance and the absence of business interruption are, by far, the two most common findings.
Capitals frozen years ago
The plant was insured at its construction cost from fifteen years ago. Rebuilding it today costs twice as much, and average condition cuts the settlement in half.
Loss of profits absent or short
A six-month indemnity period is bought when replacing a production line actually takes more than a year.
Stock valued by annual average
In a seasonal business, stock during the campaign triples the average. If the fire occurs at peak, underinsurance is massive.
Declared protection measures not maintained
Sprinklers out of service or detection without maintenance are common causes of reduced compensation.
Scope
Main covers of property damage insurance
- Fire, lightning, explosion, electrical damage and vandalism
- Water damage, atmospheric phenomena and natural risks
- Theft and robbery of stock, equipment and cash
- Machinery and electronic equipment breakdown, with all-risk option
- Loss of profits: gross margin, fixed expenses and indemnity period adjusted to the actual replacement time
- Debris removal, demolition, salvage and professional fees
The definitive scope depends on the wording of each insurer. We review it with you before recommending anything.
The JORI& method
Cómo trabajamos
El mismo método en cualquier solución: entender la exposición real antes de mirar una prima.
Análisis del riesgo
Estudiamos la actividad, el patrimonio y los escenarios plausibles. Sin ese diagnóstico, comparar pólizas es comparar precios de cosas distintas.
Diseño del programa
Definimos coberturas, límites, franquicias y exclusiones aceptables. Decidimos qué se transfiere al asegurador y qué se retiene de forma consciente.
Negociación con el mercado
Presentamos el riesgo a las aseguradoras con las que trabajamos y negociamos condiciones. Somos independientes: no pertenecemos a ninguna compañía.
Acompañamiento y siniestros
Revisamos el programa cada renovación y, cuando ocurre el siniestro, actuamos como tu parte técnica frente al asegurador hasta el cobro.
Frequent doubts
Lo que más nos preguntan sobre property damage insurance
What is the proportional rule and how does it affect me?
If you insure for less than the real value, the insurer compensates in the same proportion. With a warehouse worth 2 M€ insured for 1 M€, a claim of 400,000 € is compensated with 200,000 €. This is why we review sums insured at each renewal.
How is the loss of profits calculated?
It starts with the annual gross margin (sales minus variable expenses) and sets an indemnity period that should cover the actual time to recover the previous level of activity, not just until reconstruction. In industries with imported machinery, twelve or eighteen months is usually prudent.
Is it worth hiring the prior valuation of sums insured?
For risks above one million euros, almost always. An agreed valuation with the insurer eliminates the discussion about underinsurance on the day of the claim, which is when the company has the least negotiating power.
What exactly does the Consorcio cover and what does the policy cover?
The Consorcio de Compensación de Seguros compensates extraordinary risks —extraordinary flood, earthquake, terrorism— as long as there is a policy in force and the surcharge has been paid. The rest of the causes are covered by your insurer. We coordinate both files to prevent them from referring to each other.
Can I insure at new value or only at real value?
It is possible to agree on replacement value as new, which is recommended for machinery and buildings. Without this agreement, compensation is at real value, deducting depreciation, and the company has to cover the difference out of pocket to replace.
What happens if I increase stock during the campaign?
A stock variation clause or an automatic margin on the average capital is contracted. It is an inexpensive modification that avoids underinsurance just at the moment of maximum exposure.
Property Damage
The time your company can sustain a stoppage, measured
We review sums insured, protection measures and indemnity period, and tell you how your current policy would respond to a serious claim.
- Independent broker: we do not belong to any insurer
- The specialist in the field you consulted answers you
- The review is delivered in writing, policy by policy
Insights
Ver el tema property risks What we have written about this
Análisis
Loss of profits: the indemnity period that almost no one calculates correctly
Twelve months is the market standard and a decision that is rarely reviewed. In many industries, it is not even enough to replace the critical machine.
7 min de lecturaAnálisisUnderinsurance: why many warehouses would receive half of what their owner believes
The proportional rule is the clause that costs the most money in Spain and is almost never discovered until the day of the claim. How to detect it beforehand.
7 min de lectura
