What's Protected: Understanding Commercial Property Insurance
Commercial property insurance helps protect your business from property damage due to perils like fire, theft, vandalism, and more. Understanding this vital coverage can help you make smarter decisions about what insurance you buy and how much coverage you choose.
For example, more than 200 businesses per day experience a property fire. For a retail store, the average damage is $62,360. Office properties suffer an average loss of $27,027.
Could your small business weather that expense and still be successful?
The answer is likely "no," which is why commercial property insurance is so essential for your company. A businessowners policy (BOP) typically includes both commercial property coverage and general liability coverage.
Here's what you need to know about commercial property insurance.
What Property Is Covered by Commercial Property Insurance?
The first thing you'll need to know is what property is included in this essential coverage. You might wonder about property you rent rather than own, customer's property you have custody of, and more.
The Building and Property Belonging to the Business
The first category of property that's covered by commercial insurance is the business building and the business personal property.
The building includes completed additions, permanently installed equipment and both indoor and outdoor fixtures. Commercial property insurance covers a rented building you need to insure as well. Some rented buildings may be insured by the landlord rather than the business.
Business property includes the building's contents, such as furniture, equipment, product stock, any personal property you own and use in the business, upgrades made to a rented space, and leased business property you need to insure.
Suppose you have a business property that isn't stored in the building, such as cameras that are taken to different locations by a photographer. In that case, you'll want to ensure your policy is updated to include that as well.
Property of Others in Your Care, Custody, and Control
Sometimes, your business might require you to have others' property in your custody. For example, if you borrow equipment or have a customer's items in your shop for repair, these items are covered by your commercial property insurance as long as they are within 100 feet of the insured building.
What Types of Losses Are Covered Under Commercial Property?
There are two types of commercial property policies. One explicitly lists the covered perils, such as theft, fire, and vandalism. The other type covers all perils except those that are specifically excluded.
Of course, the more perils that are covered, the more expensive the policy is likely to be. But this doesn't mean you should opt for the cheapest one.
Some common perils covered on listed peril policies include:
Fire
Lightning
Smoke
Explosion
Hail
Windstorm
Vehicles
Vandalism
Sinkhole collapse
Volcanic action
Sprinkler leaks
When considering what type of property coverage to choose, think about the common issues in your area, and make sure you're protected against those events.
Business Income Coverage
When you insure with us, you can also get coverage for lost income and necessary extra expenses to get your business up and running again after a covered incident.
That means you don't just get help with the cost of repairing and replacing equipment and your building but also with the cost of getting your business back on its feet. That can make all the difference in successfully recovering from a property damage incident.
Not every insurer includes this with their commercial property coverage, so be sure you choose a company that gives you the full protection you need.
Coverage You Can Add to Commercial Property
Business owners have the opportunity to add coverage to a standard commercial property plan. These additions are known as coverage endorsements.
Some common endorsements you might want include:
Flood
Earthquake
Sewer, drain, or sump discharge
Extended or expanded business income protection
Spoilage
Tenant liability for damaged property
Adding these coverages to your policy can help protect your business more fully without breaking the bank — and if there's a covered incident, you'll be glad you took the time to adjust the coverage!
Compliments of AmTrust Financial
Dan Zeiler
dan@zeiler.com
877-597-5900 x134