Any business with assets to protect has a need for commercial property insurance. Whether you operate in a physical workspace, store inventory or manage equipment, commercial property insurance helps protect your business against catastrophic losses.
Coverage can be based on replacement cost or actual cash value. In addition, installing safety features can help lower your premiums.
Building Coverage
Generally speaking, the more risk your business poses for property damage, the higher your commercial insurance premium will be. Manufacturing companies with expensive equipment, restaurants that have dozens of people coming in and out at all hours and retail locations with large inventory are all at an increased risk for property loss and will pay more than a service-oriented company without a brick-and-mortar office. Discover more at Insurance Agency Outsourcing Services.
While you can do your best to reduce the risks of damage through regular safety inspections, removing extraneous flammable materials and training employees on fire prevention, there is no guarantee against natural disasters or acts of vandalism. This is why it’s important to have a well-rounded business insurance policy in place.
Commercial property insurance includes building coverage and business personal property coverage. This covers owned items like furniture and machines, as well as goods-in-process and finished products. It also covers improvements made to leased space. This type of insurance doesn’t typically cover floods or earthquakes, which require separate policies for protection.
Business Personal Property Coverage
Business personal property (BPP) coverage protects equipment, furniture and inventory inside a commercial building. BPP insurance is usually separate from a building policy, because buildings are not exposed to the same risks as personal property. BPP coverage is sometimes included in a business owners policy or commercial property policy, but standalone policies are also available.
Insurance is typically based on replacement cost valuation, not the asset value you put on tax forms. It is important to understand the differences between these types of valuation and how they impact your premium.
When choosing a deductible for your commercial property policy, consider your tolerance for risk. If your business is located in an area prone to severe weather, you may want to consider increasing the deductible to lower your premium. Deductible buy down policies are also an option to help lower your deductible. These are purchased in addition to your policy and pay for the difference between what you have chosen as a deductible and the amount you would like to choose.
Commercial Umbrella Coverage
Commercial umbrella insurance is a type of casualty policy that provides an additional layer of liability coverage. It typically enhances the policy limits of underlying commercial general liability, business auto and other liability policies.
The most common reason to consider a commercial insurance umbrella policy is that it may be more cost effective than increasing the liability limits on individual policies. It is also a great way to meet contract requirements.
Typical insurance umbrella policies offer a limit up to $15 million or more, which is enough to cover large claims in most cases. In addition to coverage for damages awarded, these policies can help pay for legal fees and other costs associated with defending your business against lawsuits or investigations.
A good risk advisor will evaluate your current insurance portfolio and identify any potential gaps in coverage. They can then bid out the appropriate policies to multiple insurers, ensuring you receive a fair price and that the policy is well suited to your risks.
Additional Liability Coverage
Commercial property insurance protects a company’s owned and leased physical assets, including inventory, equipment, furniture, fixtures and other items that are used to conduct business. It also provides loss of income, additional operating costs and rental coverage when a covered peril forces you to temporarily shut down your business.
An added benefit of many commercial property policies is the ability to add someone as an “Additional Insured.” This affords them coverage for liability stemming from acts or omissions that occur on your property, similar to how car insurance works. It’s typically only offered with property policies and is a great way to extend your commercial general liability policy or professional liability policy.
Most commercial property insurance policies are all-risk, although some exclude specific perils or have exclusionary language like mold and contamination. Depending on the type of policy and your industry, it may also be important to consider adding crime or boiler and machinery coverage.
