Commercial property insurance is essential insurance coverage for anyone who owns or leases a commercial building where they do business.
Yet there is a little more to it than simply buying a commercial insurance policy for the replacement value of the building.
This brief explanation about how to thoroughly protect business property should help any business owner understand this type of insurance and prepare them to reach out to a commercial property insurance agency to discuss the perfect policy that will suit their needs.
What Is Commercial Property Insurance?
Commercial property insurance is insurance coverage that protects a physical building that a business either owns or leases, plus any business-owned assets.
Commercial insurance also covers things like supplies and inventory, lost income, accounts receivable, and expenses relating to the rebuilding and restructuring of a business after a covered loss is sustained.
What Are Important Coverage Options To Understand?
Purchasing a policy from a commercial property insurance agency involves more than just protecting a building from the damage that could happen in a fire, for example.
There are multiple policy types to understand and different ways in which the benefits are paid out.
Depending on the policy, the property type and value, and many other factors, these are important details that should be discussed in depth with an experienced commercial insurance agent to be sure the correct type and amount of coverage are purchased.
The three types of policies offered for commercial property include:
- Basic Form - Cover the basics which include loss due to fire, wind, lightning, hail, vandalism, collisions, civil commotion, sinkholes, and other qualifying events that cause damage to business property.
- Broad Form - Expands the basic form to include damage due to leaking appliances, weight of ice, sleet, or snow, falling objects, structural collapse, and more.
- Special Form - Covers for all losses regardless of reason, other than policy exclusions. Flood, earthquake, acts of war, damage caused by vermin, and a few others are generally excluded and should be covered under additional riders.
As with most insurance policies, business owners must also determine whether they wish to insure for replacement cost or actual cash value.
What Additional Commercial Insurance Coverage Is Needed?
When purchasing commercial property insurance, it is essential to pay attention to the exclusions including general ones throughout the insurance industry while others are regional or situational, and purchase that additional coverage as needed:
- Flood Insurance - Flood insurance must generally be purchased through a separate flood policy. It is critical coverage that every business needs as floodplains are continuously changing.
- Windstorm and Hail - In areas where they are prevalent including many parts of Texas, additional commercial insurance to cover windstorms and hail may be required.
- Auto and Inland Marine - Business vehicles and any other machinery or property not covered by general policies require their own commercial auto or inland marine policies.
- Business Interruption - Pays benefits when a business is unable to bring in any income due to losses suffered and while rebuilding to be able to function normally again.
- EDP Insurance - Extends the limitation for the loss of computers and other related business equipment and adds coverage for losses due to power surges, viruses, and other causes.
- Ordinance or Law Coverage - Pays to improve buildings to updated building code standards after a loss.
- Extra Expense Coverage - Pays additional and unexpected costs to rebuild the business after a loss.
These are just a few of the additional policies a business owner might consider purchasing from a commercial property insurance agency.
Get The Commercial Insurance Coverage You Need
Commercial property insurance is a critical protection that every business owner must purchase to protect their business and livelihood from the disasters that can put them out of business in an instant.
When purchasing commercial insurance coverage, it is important to understand the need to buy a customized policy that provides the type and amount of coverage each specific business needs.
Meet with a local commercial property insurance agency who will take the time to learn about your business and work in your best interest to define a comprehensive and cost-effective way to protect it!
