Commercial Property Insurance

There are many factors that will affect the cost of your Commercial Property insurance. First and foremost, the coverage limits that you have on the property will affect the premium.

Certainly, the higher the limit the higher the premium. Additionally, any claims history and the higher the risk your business presents will affect the cost. For example, if you are selling fireworks indoors, that would present more risk than a clerical office setting.

While it sounds like the words all-risk would mean that everything is covered, it is important for you to know that is not the case. All-risk means that all perils are covered unless they are excluded.

It is critical for you to pay attention to the exclusions within your Commercial Property policy.

There are some common exclusions to look out for which include flood, pollution, damages by rodents or pests, wear and tear, and earth movement.

As discussed above a common Property insurance type is all-risk which will cover most physical damage claims to your property.

The other type of Property insurance is named-peril coverage which is less comprehensive and will only provide coverage for specifically named perils like wind, fire, and business interruption.

The word premium can be confusing as it is defined as many different things in the dictionary. For insurance purposes, though, it means the cost of the policy. The annual policy premium is the amount you will pay for the Property insurance for the year.

Commercial Property Insurance is specifically limited to property owned by the business. This property must have either been purchased by the business or have been purchased from someone else and had its ownership transferred to the business. This property should be essential to the operations of the business, even if it is not directly tied to the revenue stream. This type of insurance does not cover commercial vehicles. Although commercial vehicles could be considered “property” of the business, separate insurance exists for commercial vehicles due to separate regulations.

Commercial Property Insurance covers everything you own that fits under the definition of a “physical asset." This can be anything, as long as your company can prove that the item was purchased for business purposes, or that its use is solely business-related. Even if your company only stores physical documents, these too could be at risk. Office equipment, buildings, and mechanical equipment are only examples of what can be covered. Speaking with an insurance agent can help business owners determine the full list of items their business owns that will be covered.

Not all businesses utilize physical assets as part of their daily operations. For example, a small business that operates online may not have many physical assets beyond computers. However, those computers would be considered business property. As such, their loss could be costly at best and potentially catastrophic.

Whether property is lost or damaged as the result of a natural disaster, criminal mischief or any other event beyond your control, any loss will result in a financial burden. This type of insurance will cover the cost of replacements, repairs, lost income, building costs, and can even cover higher costs that due to inflation.