Commercial property insurance covers property that is essential to the daily operation of your business from a variety of losses. It is considered an essential type of coverage for businesses of all sizes and across all industries. Here is a closer look at what commercial property insurance is and how it can protect your business.
The Coverage Provided By Commercial Property Insurance
Commercial property insurance provides a business with a similar type of protection that property insurance gives to homeowners. It offers protection to your company’s physical assets from storms, explosions, fires, burst pipes, vandalism and theft, among other perils.
Even a small fire or storm could be enough to shut your business down for an extended period of time and put it at risk of closing permanently. A comprehensive commercial property insurance plan can provide support to facilitate your business’s recovery from unexpected events.
Commercial property insurance generally covers your building, along with everything inside and outside of it. This includes:
- Important documents
- Exterior signs
- Others property
Who Needs Commercial Property Insurance?
Any business that owns or leases office space, manages inventory, maintains the property of others, manufactures products, or leases equipment needs commercial property insurance.
It is important to have this type of insurance in place when signing a lease as property owners generally require their tenants to maintain insurance with limits that are sufficient to repair or restore their building. Although landlords do carry property insurance for the building itself, it does not cover the expensive business property that tenants keep in their space. In addition, lenders generally require businesses to maintain commercial property insurance for the life of their mortgage.
What Is Not Covered?
Commercial property insurance plans are designed to be comprehensive, but there are some perils that can be included or excluded from the policy depending on your business’s location and risk profile. Therefore, it is important to discuss the most appropriate coverage for your business with your broker.
You should also decide whether you want coverage for only named perils or all perils. A named perils policy will only cover specific perils that are listed on the policy and is a more affordable approach than a policy that covers all perils.
The Cost Of Commercial Property Insurance
Here is a look at the factors that can influence the cost of a commercial property insurance policy.
If the area where your business is located is prone to storms and other natural disasters, this can affect your commercial property insurance premium. Buildings that are situated in cities or towns that have excellent fire protection will be cheaper to insure than buildings in more remote locations and those that have limited fire protection.
The nature of your business will also impact its fire rating and, by extension, the cost to insure it. For example, an office building tends to rate better in terms of fire risk than a car repair shop or a restaurant. The other tenants in your building could also influence your commercial property insurance cost as one hazardous occupant can reduce the fire rating of the entire building.
The Building’s Construction
Companies can expect to pay higher premiums for commercial property insurance for buildings that are made of potentially combustible materials than those built using fire-resistant materials. Some internal structural elements may also impact the building’s fire rating, such as wood floors, stairways and partitions. Features such as fire-resistant doors, floors and interior walls can help improve your fire rating.
Is Commercial Property Insurance The Same Thing As A Business Owners Policy?
A Business Owners Policy, or BOP, is an affordable package of insurance that many small business owners purchase. It combines three types of insurance: general liability insurance, business interruption insurance, and commercial property insurance. Because it includes some coverage for commercial property as well as other types of coverage businesses need, it is the ideal solution for a small business with a limited budget, a low risk profile and basic coverage needs. However, it is important to keep in mind that a standalone commercial property policy will provide greater protection with broader coverage and higher limits, albeit at a higher price.
Reach Out To The Business Insurance Professionals
Your assets keep your business running, and they represent a significant investment for your company. Make sure you can afford repairs or replacements after unexpected events with help from commercial property insurance.
If you are looking for a customized commercial property insurance policy, get in touch with the business insurance professionals at Atlas Insurance online or over the phone at (808) 400-6680. Our experienced team will work with you to determine the risks your business faces and provide a solution to give you the coverage you need at a price that suits your budget.