How does commercial property insurance work?
Commercial property insurance protects your company’s physical assets – things like buildings, furniture and equipment, supplies, computers, inventory, customer’s goods, signs, fencing, and even lost income.
The policy will provide financial reimbursement to help recover the cost of items damaged, lost or destroyed from fire, theft, vandalism, burst pipes, explosion, and more. You may even be able to protect against floods and earthquakes, though many times you’ll need separate policies for that.
How you could be affected by commercial property insurance claims
Unfortunately, the “unexpected” happens more frequently than we’d like. And with forty percent of small businesses being likely to experience a property loss, having the right insurance can help alleviate the incredible financial burden of a claim.
Of businesses are affected by a
burglary or theft
Of businesses are affected by wind
or hail damage
The average cost of a fire claim for a
small business
What is (and is not) covered by commercial property insurance?
Just like every business is unique, no two commercial property insurance policies are the same. Each policy has limitations, exclusions, and additional optional coverages that you’ll want to be aware of, and have customized to fit your needs, before you buy.
What is typically covered?
Building repair/replacement- Business personal property replacement
- Home-based business property replacement
- Property in transit or off-site
- Computers and media
- Equipment
- Tools
- Inventory
- Furniture and fixtures
- Leased or rented property
What is not typically covered?
Floods (hint: you may need flood insurance)- Earthquakes (optional)
- Accidental damage (i.e. dropping something)
- Damages to someone else’s property
- Damages to your business vehicles
- Intentional property damage
Got commercial property insurance questions? We’ve got answers.
Commercial property insurance isn’t required for your business (unless you have a loan or lease), but it is something you should consider. Let us help you decide whether this coverage is right for your business.
Do I need commercial property insurance?
Maybe.
If you are just starting out, and don’t have a lot of property used in your business, you might not. But if you have anything of significance, or more importantly, anything that would create a financial burden should you have to replace it, then you will likely want to purchase commercial property insurance.
You may also be required to purchase property insurance if you are a tenant with a lease, a building owner with a mortgage, a business with a line of credit, or have leased or rented any type of equipment (such as copier, postage machine, equipment and more).
Do I have to buy a business owners policy to get commercial property insurance?
No, but you’ll probably want to.
A business owners policy (BOP), also known as a commercial package policy, combines commercial property insurance and commercial liability insurance into one policy. The advantage of this is you get a combination of coverages, usually at a lower price than if you were to buy each policy separately. And who doesn’t want to have more coverage for less money?
How much does a commercial property insurance policy cost?
It depends.
Policies can range anywhere from a few hundred to several thousands of dollars, depending on your unique business needs and how much property you own and wish to cover.
Some of the factors that will determine the price of this insurance are the upkeep and condition of your business location, what protection and controls you have in place to keep your property safe, how much coverage you need, and your annual gross revenues.
How can I reduce the cost of my commercial property insurance?
Thankfully, there is a lot you can do to help reduce your overall insurance costs.
First, partner with an independent insurance agent that understands your industry, can provide expertise and advice, and will shop your insurance to always make sure you have the best protection at a price that fits your budget.
Next, work to mitigate any potential claims before they happen. Making building upgrades, installing alarms, creating a disaster plan, and adapting safety protocols are always a great idea. Pacres Atil Insurance is able to provide many tools and templates to help get you started.
Lastly, you can elect a higher deductible (if you’re comfortable) and enroll in automatic payments to reduce your cost and eliminate billing fees.
How you can keep your business up and running with commercial property insurance
Natural disaster protection
Fire, wind, snow, ice, hurricanes, tornadoes, and water – we’ve seen it all. And it all can cause some serious damage. But the right property insurance can protect you from whatever Mother Nature throws your way.
Income replacement
One third of small businesses never reopen after a devastating loss. Business income coverage on a commercial property insurance policy can help keep your business running.
Investment protection
You’ve invested heavily by buying everything you need to run your business. The right property insurance policy will reimburse you should you experience a loss.
Simplifying commercial property insurance … one blog at a time
Find the answers to all your insurance questions through the helpful resources in our free online Learning Center.
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