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Commercial Property Insurance: What You Need To Know

Commercial Property Insurance: What You Need To Know
by Arthur Williamson

Your business is growing. Your revenue is booming. Things are great. However, you know that everything is still at risk, and it’s not always sunshine and rainbows. You need to prepare for the stormy season that may come like a thief in the night. So, you think about commercial property insurance. But what is it exactly? 

Today, let’s explore what commercial property insurance coverage you can have for your business.

We’ll also answer questions, such as what requirements would you need to comply to get your commercial building insured, what assets are covered and not covered, and how much will it cost your company to buy a property insurance policy — I will also provide some tips in finding affordable commercial property insurance companies. 

(image alt text: a coffee shop covered by commercial property insurance )

What is Commercial Property Insurance?

Commercial property insurance provides financial protection to businesses that own or rent a commercial building or space—primarily protecting the company from unexpected expenses caused by unfortunate events such as natural disasters, burglary or theft, and accidental fires. 

Now, it’s important to understand that while business property insurance companies cover your business space and equipment, the policy may or may not include equipment breakdown coverage.

If you also want to invest in the latter, make sure to let your insurance provider know. 

What is Covered and Not Covered by Commercial Property Insurance?

Just like any other type of insurance policy, your commercial property policy cannot cover everything in your business and every situation that happens in your business property. Here’s a quick rundown of what’s generally covered and not covered by your policy:

Covered by Commercial Property Assurance 

These are the things that are insured in your company when a covered incident affects your business property, such as theft, vandalism, fire, natural disasters, and other occurrences that are stated in your insurance policy:    

  • The building that houses your business 
  • The pieces of equipment inside your business property, such as computer systems, cloud servers, furniture, tools, important documents, account receivables, and inventory. 
  • The things that surround your building, such as landscapes, fences, and exterior signs. 

Now, remember that there can be a myriad of things that a commercial property policy can cover. Consult with an insurance provider for businesses to learn more about property insurance coverage. 

Not Covered by Commercial Property Assurance

Here’s a list of incidents that your property insurance policy does not cover: 

  • A customer demand or claim for bodily injuries that occurred in your business place 
  • Employee damages to client property
  • Employees accidents when doing their job 
  • Other incidents NOT related to theft, vandalism, fire, natural disasters, and other insured occurrences that are stated in your insurance policy. 

Remember: if you want your business property to be covered from the abovementioned unfortunate incidents, you can get a bundle with your commercial property policy—it’s best that you speak with a property insurance agent and make your concerns known, so your policy can be customized to your business needs and demands. 

What Kind of Property Insurance does my Small Business Need?

Your property insurance should primarily depend on the kind of business you have. For instance, you purchased a stand-alone business property insurance policy to protect a building that you own as well as all the contents in that particular building. 

However, to meet your company’s needs and demands, you can invest in different property insurance coverage as well, such as the following: 

Business Owner’s Policy 

Business Owner’s Policy (BOP) can consolidate your commercial property protection policy and general liability insurance under a cheaper premium rate instead of having to pay for separate policies, which can be more expensive. 

The BOP covers your company’s movable assets, such as your office furniture and supplies, manufacturing and production machinery, computer systems, and other items.  

(image alt text: business properties insured by a business property insurance coverage )

General Liability Insurance 

General liability insurance protects your company from sudden unexpected expenses caused by accidental injuries done to your customers, clients’ property damages, and other related lawsuits to your business. 

(image alt text: slipping on a discarded banana peel leading to injury - an unfortunate event in a commercial property covered by a business property insurance policy)

Business Interruption Insurance 

Business interruption insurance provides financial protection to your company in cases of sudden and forced closure due to a property-related incident, such as a burst pipe in the building or your warehouse caught fire. 

(image alt text: fire - incident covered by commercial property insurance companies)

Inland Marine Insurance 

Inland marine insurance protects movable business property, such as items that your company temporarily cares for—artwork displays in a museum, classic hardbound books in a bookstore, and expensive jars sold in your cafe. This kind of insurance also protects businesses that move from one place to another, such as a food truck.    

(image alt text: food truck insured under commercial property insurance coverage)

Factors that impact commercial property insurance costs

The cost of commercial property assurance coverage commonly differs based on the following business factors: 

Location 

Property insurance on commercial buildings located in states and cities with a top-notch record of protection typically costs less than business places situated in areas that have little-to-no fire protection. 

Construction 

Commercial property assurance coverage often costs more when you are insuring a business building that is primarily made of combustible materials, such as wooden floors, walls, and doors. In contrast, commercial places constructed with fire-resistant materials could pay relatively lower premiums. 

Occupancy 

This factor often examines the risks that come with the business. For instance, insuring a restaurant and a repair shop will cost you more than insuring a typical office space—this is because the former commercial property samples engage more in fire risks than the latter. 

Fire and Theft Protection 

Commercial property assurance companies also consider a company’s preparedness on fire and theft accidents by checking the locations of fire and hydrant stations, the presence of alarm and sprinkler systems, and a security system installed in your commercial building. 

Tips for Finding Affordable Commercial Property Insurance

Nowadays, investing in a property insurance policy is a must. You can’t just let unexpected incidents take everything from your growing business, right? And we understand that you need something that fits your company’s needs and budget. 

So, here are a few tips for finding affordable commercial property assurance policy: 

  • Make sure that you know the approximate value of your commercial property and business equipment. 
  • Manage risks; set up security and alarm systems, such as security cameras, shatterproof glass, and deadbolt locks; install fire-preventions systems, such as smoke detectors, and sprinklers.
  • Consider combining property insurance with general liability insurance policy to get not only massive discounts, but also broader coverage. 
  • Talk to a property insurance expert to help you with getting the best coverage that fits your company’s needs and budget. 

Don’t Leave it up to Chance - Insure and Assure

  • A commercial property insurance policy is another form of financial protection that covers your business against sudden expenses that are generally due to theft, vandalism, fire, and other natural disasters. 
  • Your business, regardless of how big or small, might need more insurance coverage other than commercial property assurance. 
  • Factors such as location, occupancy, construction, fire and theft protection affect the cost of your business property insurance. 
  • To find affordable commercial property assurance policy, you must first ensure that you know the value of your business property and the equipment in it, manage your risks by installing security systems, combine your policy with other insurance policies that your business needs to get significant discounts while gaining a wider coverage, and consult a property insurance agent to help you sort things out and give you the best deal.
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