Fire & Burglary Insurance for Businesses

Business fire insurance pays to repair or replace your buildings, stock, machinery, furniture and fittings after fire, lightning or explosion. Most policies and SME packages also include, or let you add, storm, flood, earthquake, burst pipes, impact by vehicles or aircraft, malicious damage and riot and strike. Check the schedule: perils that are not listed there are not covered.

Fire and perils covers only the causes named in the policy, such as fire, lightning, flood and storm. Industrial or asset all risks covers any sudden physical loss or damage that is not specifically excluded, so it adds accidental damage and often theft, and usually has a business interruption section. It suits factories and larger asset bases and can replace separate fire and burglary policies.

Only if you bought it. Standard fire and burglary policies usually exclude riot, strike, political violence and terrorism unless the extension or a separate political violence and terrorism (PVT) policy is in place, and a 2024 Kenyan case refused a riot claim for exactly this reason. Some SME packages include riot and strike under fire but carry a high excess on the PVT section.

Often, but not always. Many insurers list flood among the standard fire perils, while others treat it as a 'special peril' extension with its own conditions. After the 2024 floods, which produced at least KES 3.15 billion in flood claims, check that flood appears in your schedule, especially if your premises are low-lying or near a river.

Theft is only covered where entry to or exit from the premises was forcible and violent; theft by staff is excluded. Insurers also set security conditions, which can include a watchman or guard outside working hours, grilles and strong locks, an alarm with a maintenance contract, a locked safe and proper stock books. Breaking a warranty can void a claim, so read them before you sign.

Money insurance covers cash and cheques lost through theft, robbery or hold-up while in transit to or from the bank, on your premises during business hours, in a locked safe or strongroom after hours, and with authorised staff. Most wordings also pay for damage to the safe. It is priced on your estimated annual cash carried, about 0.1% of it, with a minimum of around KES 3,000.

All risks insurance covers specified portable items, such as laptops, phones, cameras, surveying and medical equipment and tools, against accidental loss or damage, including theft, anywhere within the territory you choose: Kenya, East Africa or worldwide. You list each item and its value. Expect an excess of about 10% of each loss and exclusions for wear and tear and mechanical breakdown.

Most property policies carry an 'average' condition: if you insure for less than the true value, the insurer cuts your claim in proportion. Insure a property worth KES 10 million for KES 5 million and a KES 2 million loss pays about KES 1 million. Review your sums insured at every renewal, especially stock that rises during busy seasons.

Insure each item at what it would cost to replace today: for equipment, the new price plus duty, transport and installation; for buildings, the cost of rebuilding, which a valuer can assess, not the market price of the property; and for stock, your highest normal level, not the average. Under-insuring triggers the average clause and reduces any claim in proportion.

Usually: the completed claim form, photos of the damage, an itemised list of what was lost or damaged with make, age and value, purchase invoices or replacement quotations, repair estimates for items that can be fixed, your stock records and books of account, and any fire brigade or police report. The loss adjuster's report forms part of the claim. Keep damaged items until the adjuster has seen them.