Commercial property insurance protects the physical assets you use for your business, including equipment, computers, inventory, electronics, furniture and more. Whether you own, lease, or rent your physical location, it can protect you from fire, theft, natural disasters and accidents. You can customize policies to meet your needs and cover almost all assets essential to your operation. Regardless of the industry, it’s a vital part of your business’s risk management strategy. Learn more about how this type of insurance works.
Every business, big or small, can benefit from the right commercial property insurance.
- Recover after a loss. Your business must recover immediately after a loss for you to maintain your continuity and protect your reputation.
- Repair or replacement costs. Any covered loss means reimbursing the costs through either repair or replacement. Instead of relying on your business funds to pay for broken equipment or any other covered expense, your policy could respond to the loss.
- Business interruption coverage. Your insurance can help you pay your upkeep, such as your payroll, bills, and other expenses, until you’re back to business.
- Unexpected losses. Unexpected problems such as natural disasters are out of your control. They can cause a significant amount of money, and your policy can help keep costs down.
What does it cover?
Typically, commercial property insurance covers business office or building, tools, equipment, supplies, inventory, electronics, furniture, valuable documents and records, and outdoor fixtures such as signs and fences. It has two common forms, the named perils and the open perils policy. Named perils policy covers only specified issues, which commonly include theft, fire, wind damage, and vandalism. Open perils policy, on the other hand, is broader as it covers any problem except the exclusions. Because of this, it costs more than a named perils policy.
What does it not cover?
Knowing what commercial property insurance does not cover is essential so you can buy additional coverage. These include a car accident while in your company car, which may be covered by commercial auto insurance. Another one is flood damage. It is commonly not included under commercial property insurance, so you must buy flood insurance separately. Other typical exclusions include damage or loss from an earthquake, terrorism, war, intentional damage, nuclear hazard, and normal wear and tear.
Cash vs. replacement value
Policyholders have an option to receive cash or replacement value for losses. Cash value means cheaper premiums and pays out only the current worth of the damaged or lost asset. Replacement value has higher premiums and reimburses the damaged equipment with a brand new equivalent.
Your commercial property insurance can be your financial back-up in worst-case scenarios because you do not have to pay for any damage to your property or equipment out of your pocket. Depending on the nature of your business, you are likely to buy additional coverage to have a well-rounded insurance plan. Having your business insured with a suitable form of coverage requires a reliable insurance provider, so make sure not to overlook the importance of finding the best company.