For most businesses, an address signifies success; if your business is in 1 Rockefeller center means you are successful, but every business starts from somewhere. Apple started in Steve Jobs parents’ garage. Commercial property insurance protection ensures that the dream does not die. In case of any mishap or unfortunate event, your entrepreneurial dream should stay alive with the help of the right protection.
Any commercial property is covered by Commercial property insurance Perils such as fire, theft, and natural disaster are covered by Commercial property insurance. Commercial property insurance is carried by businesses, including retailers, manufacturers, service-oriented companies, and not-for-profit organizations. It is generally bundled together with other forms of insurance, such as commercial general liability insurance.
Business interruption should also be a part of commercial property insurance. A good policy should be designed to reflect this, or you can find you are not appropriately covered.
Assets essential to your business are protected by Commercial property insurance and carriers’ customized policies to meet your specific needs. Losing a property to fires, theft, weather events, or simple accidents for a small business can impact you and your family’s livelihood.
A business’s risk management strategy should include Commercial property insurance, which reimburses you for lost or damaged equipment, inventory, and other property, regardless of industry.
This coverage part insures the buildings list on your insurance policy without sounding too obvious.
A structure or the building can be your own or a property that you do not own but are responsible for insuring.
Building coverage, in addition to the actual structure, ensures the following parts of your building:
Fixtures (including outdoor fixtures)
Permanently installed machinery and equipment
Your Business Personal Property
Business personal property (BPP) is the second commercial business property insurance policy coverage; it covers the building’s contents and doesn’t cover the building (unless you are a tenant who has permanently installed improvements to your rented space). Examples of what the policy lists:
Fixtures and furniture
Equipment Stock and machinery
Personal property owned and used in your business by you
Betterments and improvements by Tenant (upgrades to the occupied space)
You have a contractual responsibility to insure leased personal property
Personal property within 100 feet of the insured building is covered by commercial property insurance policies.
Personal Property of Others
The property you are borrowing or even a customer’s property is part of the business property insurance policy; this is an overlooked but essential part of the coverage; this coverage only applies to property within 100 feet of the insured building, similar to the business personal property coverage.
Additionally, suppose you were to turn in a claim under this coverage. In that case, it will only pay the property owner and not yourself.
Based on the information provided to the CAQ agent, the perils covered under this policy are determined by the insurance company.
Not all insurance policies are created equal. Causes of loss form is the easiest way to spot differences between good and not-so-good commercial property coverage. Cause of loss form is the core of what events are covered.
Although a little technical and unexciting, knowing what perils your building will be covered will give you peace of mind. Also, it will allow you to prepare for unforeseen circumstances.
Basic, Broad, and unique are the different options you will generally see
Each of the three forms has a different meaning for your business:
Special Cause Of Loss Form
The particular causes of loss form offer the best coverage of the three coverage forms.
Suppose you look at all the causes of loss forms. In that case, both the primary and broad forms offer a list of what events they insure against, but what is special about the special form is that it covers, unless excluded, all direct physical damage to your property.
This is why the unique form is often referred to as an “all-risk” policy; it covers all direct physical damage unless excluded.
Instead of a list of covered events, insurance companies give you a list of exclusions. This gives you quite a few advantages. First, you start from all direct physical damage to be covered. . Having everything covered unless excluded covers a broader area of potential claims.
Finally (and arguably most importantly), the burden of proof shifts to the insurance company for claim denial with the unique form. Whereas, in the court of law, if everything is excluded unless covered (broad and primary forms), you must prove the listed perils were covered under your policy.
In contrast, unless excluded, everything is covered under the particular causes of loss form. The proof is in the pudding, and the burden of proof falls on the insurance company to prove if an event is covered or not.
Basic Cause Of Loss Form
This is the list of perils the basic causes of loss form insures against:
Damage caused by an aircraft or vehicle
Broad Cause of Loss Form
Between the special and the basic form is the broad form. It adds additional perils to the basic policy. The broad form covers the basic form plus:
Weight of snow, ice, or sleet
Collapse from specified causes
Leakage from appliances (Water damage)
There are non-standardized policies in the market that might not give you the coverage that will protect you, so avoid these non-standardized policies or consult with us to help you review them or suggest better options.
Still, most of the time, it is customized to the detriment of the policyholder in that it limits coverage.
Every type of property damage is not covered by commercial property insurance. This coverage will not cover your business if:
One of your employees accidentally puts a hole in your client’s wall
Your customer drops their cellphone or laptop when they trip over a box in your office
An accident occurs while making a pick up from a customer and damage your vehicle.
A nearby brook overflows after a heavy rainfall causes flooding near your building and damages your inventory.
Intentionally damage property by you or your employees
You can get other types of commercial insurance to give your business comprehensive coverage that can help cover these kinds of claims.
It’s essential to know the instances where commercial property insurance won’t be sufficient, and you may need extra protection:
• You get in a car accident while driving the company car on business pick up. This would be protected by commercial auto insurance.
• Flood damage is not under the prevue of commercial property insurance. A separate flood insurance policy will protect your office from flood damage.
•A client’s wall is accidentally damaged by you while visiting them on business. This would be covered under general liability insurance.
Here are other few examples of exclusion you will see on almost all property insurance policies:
Military action and war
Wear and tear
If you want some of these exclusions covered, you’ll need a specialized and separate policy. In rare cases, insurance companies may offer limited coverage for a specific peril if you are in a low-risk area.
An insurance policy will never cover intentional damage and normal wear and tear exclusions.
Any damage to business equipment and property without commercial property insurance, you are responsible for paying for out of your own pocket. In a worst-case scenario, like a massive fire, this could put you out of business without insurance as a financial backup.
The cost of commercial property insurance mainly depends on the value of the business property, equipment, and other assets. Someone working from home and insuring a home office would pay far less premium in commercial property insurance with its own office building. Still, both have a business property that could be protected with a commercial property insurance policy.
Insurance companies consider some other factors when pricing commercial property insurance policies. They are:
Your business location. Is it prone to wind or rainstorms? Severe weather can damage a property.
The construction of the building. Is the building made with fireproof, weatherproof construction materials? Is the electrical and plumbing current?
Industry. A Tax or financial planning office will likely carry far less risk than a bakery or kitchen.
Protection against fire and theft. Proximity to the nearest fire station? What kind of sprinkler system or fire alarm system is in place? What type of CCTV or security system is on-site to thwart thieves?
The median cost of a commercial property insurance policy is $63 per month or $756 a year.
You can get commercial property insurance coverage if you rent your office space and/or your office equipment; you don’t need to be a property owner.
Commercial insurance’ and ‘business insurance.’ are interchangeable terms; they sound different but are the same. Basically, both are in the same category of insurance and provide insurance protection to all kinds of businesses.
Business property insurance covers physical assets like buildings, equipment etc., liability insurance protects financial interests as in lawsuits and settlements. A business needs to carry both to protect itself fully.
Commercial property insurance requires a capable agent who understands the nuances of building, what is covered and what is not; the equipment, furniture, fixtures, etc., need to be evaluated and put in forms so that you get maximum benefit, in case of any unfortunate event.
If there is a large increase in your premium without any satisfactory explanation, then you need to compare and provide you with the best possible solution.
Owning a business is a dream that a hot dog vendor to Elon Musk wakes up for every morning. It is not just you but your family, employees, and their families that depend on the success of the business. One unfortunate incident can ruin the dream and make it impossible to recover. It makes sense to talk to a CompareAquote.com agent to help you protect your commercial property, so the dream stays alive.
Additional discounts and savings for bundling your home and auto. I can not promise a number.
Additional discounts and savings for bundling you home and auto. I can not promise a number.