What is Commercial Property Insurance?
Success and profitability are the top priorities of every business owner. However, when unforeseen incidents like theft, fire, or damage disrupt your business, commercial property insurance can help you recover from the resulting losses and re-establish your business operations more quickly. Generally, it covers property owned or leased by your business.
In addition, the insurance coverage protects you from costly legal fees and other expenses, resulting from accidents or disasters. However, not all disasters are covered. For example, if an earthquake or flood occurs, you may be required to purchase additional coverage to protect you and your business from the damage.
Get Replacement Coverage for Lost or Damaged Assets
As your company expands, its operational and financial expenses also rise. If your assets were destroyed due to unfortunate events, commercial property insurance can help make up for your losses. This way, you will have enough funds to get replacements and even get compensated for the lost earnings caused by downtime.
What Is Covered and What Isn't?
Commercial property insurance has varying unique coverages, from inland marine to cargo insurance. Nevertheless, it generally covers all business assets like electronics, computers, furniture, machinery, fixtures, and building structures.
However, your insurance policy doesn’t typically cover:
Damage to property not owned by the insured
In the event your mobile phone repair shop is robbed while you are away, your insurance will not cover your customers’ stolen gadgets as you don’t own, rent, or use them. In place, you will need general liability insurance.
Earthquakes
Earthquakes don’t apply to commercial property insurance as they are not considered a “regular or expected event.” However, if you reside in an area prone to this peril, you need to get commercial earthquake coverage. This clause compensates you when an earthquake damages your office space.
Flooding
Floods are also unique coverage for homeowners. Likewise, for businesses, flooding is not covered by standard property insurance policies — meaning you can’t get protection for this risk, which is considered a “special peril.” You’ll need to add a separate endorsement.
Equipment Breakdown
Generally, insurance companies provide coverage for events that might occur, not those that are bound to happen. Due to constant wear and tear during operations, business tools and machines tend to malfunction, so you will most likely have to pay for repairs. Your insurer will only pay for new equipment if your existing machinery is damaged, destroyed, or stolen.
Commercial Auto Accidents
While commercial property insurance covers your building, it doesn’t protect your business vehicles, as both are distinct categories of property. To get protection for your company cars, you will need to buy a separate policy: commercial auto insurance. This policy covers your vehicles for liability and damage in the event of an accident. In addition, it covers any damages caused to other people or property in an accident.
What is the Cost of Commercial Property Insurance?
Several factors influence the overall cost of a commercial property insurance policy. For instance, your area of operations, property type and location, and the security measures you have in place. For this reason, you need to consider how much protection your business needs.
Business owners spend an average of $63 on commercial property insurance. They are also subject to a $1,000 deductible and a $60,000 limit. However, you may pay up to $3,000, depending on your situation and the insurer.
To get the best deal when shopping for commercial property insurance, compare quotes from multiple providers. Furthermore, make sure that your insurer has a financial strength rating of at least “A” from AM Best Company. This indicates that the insurer is financially stable to meet its obligations.
The coverage provided by such companies ensures that your business is fully protected in the event of a catastrophic event.
Insure Your Business Against Unforeseen Expenses
Your business may have some inherent risks you had not previously considered. By way of illustration, if your office space is destroyed by fire and has to be rebuilt, you may not get a permit exemption — meaning you have to foot unexpected expenses that may arise during renovation. You can avoid such out-of-pocket payments by getting the right policy.
Other hidden expenses may arise while rebuilding the structure, like paying the contractors to remove debris from the premises or repairing additional weather-related damage. Don’t sweat it as commercial property insurance covers such costs. You rest assured, knowing that we take care of your financial burdens. Contact us today for the best quote and advice.
