Commercial Property Insurance
How much business could we actually do without computers, files, furniture, and product inventory? Protect these key components against the devastating effects of their loss with a business property insurance policy.
When most of us think of commercial property insurance, thoughts may gravitate towards large objects such as buildings. But it’s often the smallest pieces of commercial property that are most important to your business.
That’s why a great commercial property insurance policy will help you survive the loss of any vital property, whether large or small. With this policy, you will be protected for the replacement cost of all of your vital property.
What Is Commercial Property Insurance?
Commercial property insurance is used to cover any kind of commercial property. This kind of insurance protects your commercial property from perils such as fire, theft, and natural disaster. Different kinds of businesses such as manufacturers, retailers, service-oriented businesses, and not for profit organizations should obtain commercial property insurance. Furthermore, commercial property insurance is usually bundled together with other kinds of insurance such as commercial general liability insurance.
- Commercial property insurance is a kind of insurance that is used to cover both your property and equipment from the risk of disasters.
- Different kinds of properties and equipment are considered for commercial property insurance.
- Some factors like location and occupancy, for example, are considered when deciding on the expense of commercial property insurance.
Worried about the costs?
Don’t be. Commercial property insurance policies at our company are scalable to exactly what property you want to be covered, so you can keep control over your insurance costs.
Our business commercial property insurance can protect your business – from a minor setback to catastrophic loss. Even if you don’t own your building, lease a workspace, or work from home, business property insurance protects your business’ physical assets no matter where they are.
While commercial property insurance plans vary depending on the kind of business and type of property insured, they are usually categorized by the type of event leading to a loss, and by what specifically is insured, including:
- Destruction of your building and its contents by fire
- Business Liability
- Damage to your documents, drawings, or other valuable papers caused by a burst water pipe
- Outdoor sign or other property damaged in a storm
Understanding Commercial Property Insurance
Commercial property insurance can cost a lot for businesses that use equipment amounting to billions of dollars such as railroads and manufacturers. This kind of insurance actually provides the same type of protection as property insurance for us consumers. The difference for business owners is they usually deduct the total cost of commercial property insurance premiums as expenses. However, this does not cover losses from tenants using the building.
The value of a business’s assets including its building is the main factor in deciding how much a company should pay for commercial property insurance. We suggest making an inventory of your physical assets located at your property first before consulting an insurance agent to discuss your coverage. This essential information will help decide what exactly would be the replacement value and the level of insurance coverage your business should avail.
Regarding the increase of natural disasters, weather conditions in an area where the building is located have also become an essential factor in deciding the cost of commercial property insurance. The rates for this kind of insurance is usually higher for properties situated in disaster-prone areas. One example is rates are usually higher for properties located in regions that are prone to wildfires such as California or Colorado.
What business property insurance covers
Small business property insurance is one of the most important investments ensuring the future of your business. Here are some of the important aspects of your business that commercial property insurance helps protect:
- Your building
- Your outdoor sign
- Your furniture and equipment
- Your inventory
- Your fence and landscaping
- Other’s property
The professionals at our firm understand your business is unique. That’s why we take the time to help craft a commercial building insurance policy to fit your unique needs, offering a wide range of options that give you both flexibility and protection, at a price your business can afford.
Common types of coverage may also include:
- Completed value coverage to protect buildings in the process of construction that pays for the full value of the finished building in case it is destroyed.
- Updated building codes can add expense when repairing or replacing damaged or destroyed property—you’ll be covered.
- Loss of business income in case damage or destruction of business property results in billing problems or extended work stoppage (typically covers payroll, rental income, and other expenses.)
- Equipment breakdown coverage for damage caused by electrical and mechanical equipment through explosions, breakdowns, and electrical arcing.
- Flood insurance to cover losses to buildings and contents due to flooding, typically backed by the government-supported National Flood Insurance Program.
Earthquakes or volcanic eruptions, while rare, are covered by deductibles based upon a predetermined percentage of property value.
- Utility services failure or damage caused by a power outage, water main break, or natural gas transmission interruption.
- Inflation allowance adjusting property valuations to allow for increased construction costs due to inflation (usually set percentage based on the inflation index in the area.)
Factors Considered in a Commercial Property Insurance
- Location – Buildings that are located in cities or towns and have good quality fire protection is usually cheaper to insure than building properties that are outside a city or are in locations with limited fire protection
- Construction – Buildings made of inflammable materials will usually have higher premiums. Meanwhile, those made of fire-resistant materials could have a discount. We also suggest consulting your insurance agent first before remodeling your property since additions to an existing structure might affect a fire rating. Furthermore, internal structure elements can also change a fire rating. Using wood materials could void any reduction in your rates. While fire-resistant materials can help maintain a good fire rating.
- Occupancy – How you use your building property can also affect its fire rating. For example, an office building will likely rate better than a restaurant or car repair shop. One hazardous occupant will also negatively affect the fire rating of the entire building even though it has multiple tenants. If your business is located in a building with a more hazardous tenant, your insurance premiums will be higher.
- Fire and theft protection – You should also consider your properties to have near fire hydrants and fire stations. Also, make sure that you also have fire alarms and sprinkler systems set up on your property. A security system would also be helpful.
Type of Property to Consider for Commercial Property Insurance
You should consider insuring the following:
- The building that houses your business and including if it is owned or rented
- All of the office equipment including phone systems, computers, and furniture whether they’re owned or leased
- Accounting records and essential company documents
- Processing or manufacturing equipment kept in stock
- Fence and landscaping
- Signs and satellite dishes
Why We’re Different
You may think you want the cheapest insurance you can find, but realize you may not be getting everything you bargained for…
While most insurance products are similar in price and function, insurance providers are very different when it comes to structuring a policy that actually covers you.
There’s no such thing as a one-size-fits-all insurance policy when it comes to your business.
We’re your neighbors. We protect businesses and people we know and care about, and that means we always look for ways to protect you better, including carefully choosing the insurance companies we represent to be both affordable and responsive.
Contact us and let the professionals at our company help you forge the strongest shield possible to help you protect the things you are working hard to build.
The graphic below is interactive.
Explore and learn more about some unique risks as well as the related insurance solutions.
Building Codes and Inflation
Possible Liability: Building codes and property valuations can change from time to time and add to expenses for repair or replacement.
Solution: These would be covered under commercial property insurance.
Possible Liability: Hurricanes and heavy storms can cause floods that may affect almost any business anywhere.
Solution: Flood insurance to cover losses to buildings and contents due to flooding, typically backed by the government supported the National Flood Insurance Program.
Earthquake or volcanic eruption, while rare, is covered by deductible based upon a predetermined percentage of property value.
Possible Liability: Equipment essential to the business breaks down due to a power surge or mechanical failure.
Solution: Adding a systems breakdown insurance can protect your business from financial losses due to interruption of operations.
Possible Liability: Business-related exterior signages can be at risk of deterioration due to fire, vandalism, and weather.
Solution: This would be covered in the policy and allow for repair or replacement.
Possible Liability: In case of damage or destruction of business property results in billing problems or extended work stoppage (typically covers payroll, rental income, and other expenses.)
Solution: Adding coverage for business income insurance can protect against potential financial losses.
Commercial General Liability
Possible Liability: Claims due to accidents for damage to other people’s property, bodily harm, personal injury.
Solution: General Liability is necessary to save businesses from financial loss, lawsuits, claims, or damages due to non-professional negligent acts by your services, company operations, or your workers.
Commercial Property Insurance
Possible Liability: Business property catches fire, theft, or any other type of disaster even during or may years after construction.
Solution: Coverage for the building, signage, furniture, equipment, inventory, fence, and landscaping to be repaired or replaced in case of untoward incident.
DISCLAIMER: Consult actual policy for exact terms and conditions or talk to your insurance agent for clarifications.
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