Almost every business out there—regardless of scope or size—can benefit from having commercial property insurance. If you own a business and want to have the confidence and peace of mind in knowing your place of business is protected inside and out, commercial property insurance is key.
Of course, with all the different types of insurance policies you may need to protect your business, tackling the ins and outs of property insurance and what it covers can be a bit daunting. Here are some answers to your biggest property insurance questions.
What is Commercial Property Insurance?
Essentially, commercial property insurance exists to provide physical coverage for your place of business; this coverage applies regardless of whether you own a brick-and-mortar store, run a home-based business, or even lease a commercial space.
A commercial property insurance policy can vary greatly in its scope and coverage amounts, but generally, property insurance provides coverage for the building where you operate your business and the physical property that you keep inside.
What Does Commercial Property Insurance Cover?
Simply put, commercial property insurance is meant to protect your company's assets from damage caused by anything from fires and burst pipes to theft, vandalism, and storms.
If you own your building, you’ll want coverage against damage to the building itself. This could include fire damage, roof damage caused by a storm, or damage to an exterior sign caused by high winds.
But even if you rent your business space, commercial property coverage can still benefit you by protecting the property you keep inside your place of business, as well.
Assets can be defined as just about anything of value owned by your company and kept inside your place of business. This may include:
What Isn’t Covered By Commercial Property Insurance?
Commercial property coverage can vary, and you’ll want to work out exactly what is and isn’t covered by your specific policy with your insurance agent, but there are some types of damage that are often not automatically covered by commercial property insurance unless you purchase a separate rider policy or additional coverage.
Examples of this include flooding and earthquake damage.
Keep in mind that your business property policy will only cover expenses related to physical damage at your place of business. It will not cover liabilities, such as an employee or customer injured on the job. You will need a separate liability policy for this purpose.
Tip: Many insurers will offer an affordable Business Owners’ Policy, or BOP, that includes liability coverage and commercial protection in one single policy. Ask your insurance agent if your business is a good candidate for a BOP.
How Much Does Commercial Property Insurance Cost?
The cost of commercial property insurance can vary greatly based on a number of factors, including the region where you operate your business. Any insurance agency will also want to take the time to assess the specific nature of your business and other factors to determine your level of risk; the higher the risk your business is considered to be, the higher your premium.
Some of the determining factors that an insurance agent will likely take into consideration when providing you with a quote include:
- the condition of your commercial building (for example, is it up to fire and electrical code?)
- proximity to the nearest fire station
- the inclusion of security systems, sprinkler systems, and similar protective services
- common risks based on local climate and culture
Choosing the Right Policy for Your Business
No matter what industry you're in, having commercial property insurance can provide you with much-needed peace of mind and protection in the event of a disaster on your business property.
If you've never had to purchase a commercial property insurance policy before, you may be wondering where to begin.
If you already carry a business liability policy, you might consider checking with your insurance agent to see if the same company also offers property protection. Together you can determine the coverage that will work best for your company's specific needs and budget.
Often times, you can save money by combining different types of coverage under the same insurance carrier.
For example, if you work in an industry with a relatively low risk and have few employees or customers on-site each day, you may be able to get away with having less coverage than a business in a higher risk industry or a business that sees a great deal of foot traffic each day. At the same time, it's always better to have a little more coverage than you think you might need.
After all, if disaster strikes, the last thing you want is to realize you don’t have enough coverage to replace your damaged or lost assets.
While you'll hopefully never experience a disaster at your place of business, it's always smart to prepare for the worst. If you don't have commercial property insurance, now is a great time to talk to your agent about which policy will best protect your business inside and out.