Does My Business Need Commercial Property Insurance?
Posted by United Insurance & Financial Group, LLC on
If you are a business owner, it’s important to know if you need to get commercial property insurance, also known as business property insurance. In short, if you own or rent property that you use for your business and business equipment, you should seriously look into getting commercial property insurance; this also includes having a home-based business. This article will explore what commercial property insurance is, what it does and does not cover, and why it might be a good idea to invest in it for your business.
Commercial property insurance is a unique type of insurance that covers the company building or office space and any contents in the building or office space that the company also owns. This type of insurance protects a business’s properties and any on-site assets if there is any damage due to an accident or loss. Like other types of insurance, commercial property insurance can lessen the financial impact on a business in a weather event or other hazards. This kind of insurance is not just for the physical property but also for expensive computer equipment or other similar assets that would be difficult to replace.
What Type of Businesses Should Invest in Commercial Property Insurance?
Businesses that operate out of buildings that they own.
Businesses that lease or rent space. Whether or not a business needs commercial property insurance if they rent or lease the building is dependent on the agreement they make with the landlord. It’s essential to read the fine print in this case.
Home-based businesses. Homeowner’s insurance usually covers some expenses in the case of loss. Still, if you own more than $2,500 of equipment for your business, it’s good to look into having commercial property insurance for your home-based business for more protection.
What Does Commercial Property Insurance Cover?
Commercial property insurance almost always covers the building or office itself and any physical assets that may get damaged in an accident. This coverage can also extend to employees’ personal belongings in the workspace, but it’s important to talk to an insurance agent to see what your chosen policy includes. Usually, a commercial property policy will cover basic causes of loss, broad causes of loss, and special causes of loss. Let’s look into what is covered in these three categories.
Basic causes of loss can include fire, explosions, accidents from inclement weather, riots, cars or aircraft crashing into a property, vandalism, sinkhole collapse, and glass breakage, to name the main ones. Broad causes of loss include falling objects, snow falling through the roof, water damage from leaking appliances or a building collapse. Lastly, special causes of loss include all-around coverage outside of anything expressly excluded in the policy.
What is Usually Not Covered in Commercial Property Insurance?
Burglary (sometimes you need commercial crime insurance to cover this), flood and earthquake damages in high-risk areas, cybercrime and computer fraud, damage to company vehicles (you will need commercial auto insurance for this), losses outside of the property, loss due to employee dishonesty, and depending on the policy, income loss. Please note that some policies do cover loss due to these causes, but it is rare, so be sure to speak with an insurance agent before choosing a policy.
What Factors Affect the Cost of Commercial Property Insurance?
Location – is the area at high risk for storms and other natural disasters?
Construction – Is there new updated electrical wiring? Is there an HVAC system? New plumbing? Fireproof building materials?
Occupancy – what kind of industry is your work in? A restaurant will be at a higher risk of fire than a realtor’s office.
Fire and theft protection – How close is the nearest fire hydrant and fire station? Do you have a security system?
Contact Us Today
If you think you may need commercial property insurance for your business, reach out to an insurance agent at United Insurance and Financial Group. There are many specific kinds of insurance for businesses, so it helps to have an expert walk you through the details. Contact us today to learn more.