Commercial Property Insurance protects your business against damage to buildings and their contents from fire, theft, and other hazards. Think of it as Homeowner’s Insurance for your business.
Typically, Commercial Property Insurance covers:
Buildings you own or lease (including permanent fixtures, permanent machinery, and permanent equipment).
Business property on premises (non-permanent fixtures, machinery, equipment, computers, and inventory).
Personal property of others (in your business’ custody or care).
There are many different types of Commercial Property coverage, and businesses can usually choose which causes of loss to cover. They can choose to cover specified perils (like fires, explosions, wind, vandalism, etc.) or open perils (all losses unless specifically excluded). As it is more comprehensive, open peril coverage tends to be the more expensive option.
In most cases, Commercial Property Insurance does not cover losses incurred by tenants renting space in your building.
Who Needs Commercial Property Insurance?
All commercial property owners, including those doing business on their own property and those leasing space to other parties, need some form Commercial Property Insurance.
Commercial Property and Commercial General Liability are the two most basic types of insurance recommended to all business start-ups.
Things To Think About
Depending on policy’s language, exclusions, and endorsements, there are a number of things that could cost extra to insure:
Data, papers, records, currency, and securities.
Goods in transit.
Damage from boilers and machinery.
Earthquakes, floods, glass damage, and crime.
What you pay for Commercial Property Insurance depends on what your building is made of, the type of business (high risk or low risk) you do there, your location, your potential exposure to other hazards, and how well protected from fire you are (e.g. sprinklers, extinguishers, alarms, etc.).
Commercial Property Insurance is often bundled together with other types of commercial insurance into a Business Owners Policy or a Commercial Package Policy at a lower rate for each individual component.
There may be a coinsurance penalty if the full value of the building isn’t insured at the time of loss, so it is important to get adequate coverage.