Just bought a pub freehold and we will be owner-operators. We are going through the insurance process and been told we need to insure the pub for 60% more than the purchase price. Does that sound right or would we be paying a higher premium unnecessarily?
hmmm, I would be getting a second opinion on this. Maybe the reason is that the replacement cost would actually be that much, and being under-insured is no fun. Or maybe someone is just having a lend of you. get some more quotes and see what they look like:)
Did you get a steal with the purchase? What is the value of the stock, replacement cost (new) for the fit-out? A few factors to take into consideration. As noted above, you do not want to be under-insured.
Did you go straight to the insurance company, or using a reputable insurance broker? I would suggest the insurance broker, where they can look at what the pub does and doesn't do, to make sure the policy is right for the business you have. Good chance your accountant could recommend one for you.
I think that Todd and Brendan are probably correct. A business freehold will rarely sell for the full value of the building and the operating business so you are looking at the full replacement cost.
If you haven’t already, get an insurance broker on the task for you and compare a few more quotes.
Best of luck