What type of policy would cover the reconstruction of business premises after a fire when fully insured on the same site?

When considering the type of policy that would cover the reconstruction of business premises after a fire, particularly when the premises are fully insured on the same site, the best option is to obtain a new policy at new terms. This is essential because most existing policies may not extend to reconstruction, particularly after a significant event like a fire, unless specifically structured to do so.

In instances of reconstruction, businesses often face circumstances that require updated hazard assessments, the potential for increased values associated with the rebuilt premises, and the incorporation of modern building codes and standards, which may not have been in place when the original policy was issued. A new policy allows insurers to underwrite the risk based on the current conditions and rebuild specifications.

Further, a continuation of the existing policy may not fully address changes to the property or its usage after rebuilding, potentially leading to coverage gaps. A commercial liability policy primarily protects against third-party claims rather than property damage or reconstruction costs. An umbrella insurance policy offers additional liability coverage but does not directly cover property reconstruction. Therefore, securing a new policy at new terms is the most fitting approach to ensure adequate coverage for the reconstruction of business premises.