Whether you run a brick-and-mortar storefront or an online business, commercial property insurance can help you recover from damage and loss to your physical assets. This is a core coverage in many business owners policy (BOP) policies.
There are several different ways to value your property and furnishings in a policy, including actual cash value, replacement cost and scheduled items coverage. Discover more at Leading Insurance Outsourcing Company.
Property Coverage
Commercial property insurance helps protect business assets from a wide range of risks, such as fire and theft. It can cover items that are located in a building, such as furniture and computers, or in vehicles like trucks and airplanes. It can also include coverage for things that are kept off-site, such as inventory and office equipment.
The dollar value of the property and what type of losses are covered determine how much a policy costs. Other factors may include where the property is located, its construction and materials, how many people work there, and whether it has fire and threat protection features.
The policy will usually have a per-building or per-occurrence deductible. It will also have the option for either replacement cost or actual cash value (ACV) coverage, which determines how much it will pay when something is damaged. Replacement cost policies replace the items with new ones that are similar in quality and style, minus depreciation.
Business Liability Coverage
Commercial property insurance protects your business from the financial consequences of damage to building and contents. Most policies include coverage for perils like fire, severe storms, theft, and vandalism. Some insurers offer a bundle that packages property and liability coverage into what is known as a business owners policy (BOP). This option is often cost-effective for small businesses with low-risk profiles and basic coverage needs.
For example, if a fire breaks out in a clothing store overnight and damages the shop structure and destroys inventory, commercial property insurance may help pay for repairs and replacement costs. It can also reimburse for lost income from being forced to close the store while repairs are being made.
Other types of coverages that might be included in your policy are crime insurance for money and valuables, inland marine coverage for equipment like computers and vehicles, and workers’ compensation insurance. You may need additional policies depending on your industry and specific risks.
Commercial Auto Coverage
Commercial property insurance, or business property coverage, protects businesses from financial hardship when their physical assets like inventory, equipment, furniture and signage are damaged or destroyed by a named risk. Common causes of loss include fire, natural disasters and theft.
Depending on the policy, it may also provide coverage for additional expenses like business interruption or difference-in-conditions. For example, if your doughnut shop suffers damage from an overnight electrical fire, the insurance helps cover costs to repair the building and replace your product inventory.
It can also include hired and unowned auto coverage, which covers vehicles that you or your employees rent or borrow for business purposes. This is an important option for companies with service workers who use their own vehicles to transport customers or products. It’s available as an endorsement to many commercial property policies or as a separate policy.
Equipment Coverage
Equipment coverage in commercial property insurance pays to repair or replace malfunctioning machinery and equipment after a mechanical or electrical failure. This can be included as an endorsement to a business owner policy or a commercial package policy, and you can elect to have your coverage based on actual cash value or replacement cost. The latter option typically results in higher premiums, but will reimburse you for new property of similar style and quality without depreciation deductions.
This policy type also covers rented equipment and tools, as well as damage to items on the move or at locations other than your business premises. However, it does not cover earthquakes or floods (which can be added through separate policies) and does not address terrorism, termite control and other pest treatments, wear and tear, or intentional damage. Contact your agent to discuss additional options for your specific needs.