You must have heard your fellow business owners discussing that a commercial property insurance is crucial if you want to secure your space financially. But do you know what does that concept mean? If no, then let’s look at the commercial property insurance in detail.
What is Commercial Property Insurance?
Commercial property insurance is a type of coverage or policy for business owners that covers various business-related, as well as other natural and man-made risks, and protects a business by paying for all or part of costs when a covered loss occurs. It is a common type of business insurance that all the business owners should have in their list of insurances.
Factors Affecting Property Insurance
The geographical location of your business setup determines which environmental risks your business may face such as floods, tornadoes, snow damages, etc. Also, the land value and local law can affect what premiums you pay.
2. Property size
A large factory or warehouse will be liable to pay more tax when compared to smaller offices and shops. The larger your commercial space is, the higher will be your premium amount.
3. Safety and security
How risky and susceptible to criminal activities the location is and whether you have enough safety and security systems installed influences the calculation of your property insurance.
4. Occupancy type
The kind of business you run also affects your property insurance. A realtor’s office generally carries less risk than a restaurant or repair shop, and thus, it is liable to pay less premium.
5. Fire protection
The proximity of the nearest fire station and installation of additional firefighting systems such as fire sprinkles can determine your property’s coverage. You might have to pay extra if you only have a fire hydrant.
What Does Commercial Property Insurance Cover?
Commercial property insurance protects your company’s physical assets from fire, explosions, burst pipes, storms, theft, and vandalism. The policy generally covers your building, everything in it and just outside of it.
- Computers and other electronics
- Furniture and equipment
- Exterior signs
- Fence and landscaping
- Important documents
- Inventory kept in stock
Types of Commercial Property Insurance
Different types of commercial property insurance policies protect against different risks or perils. Some policies will cover only those risks specifically named in the policy. Other policies will cover all risks unless the policy specifically excludes them.
- Basic commercial insurance – common risks or perils, such as fire, lightning, explosion, smoke, falling object, riot, wind, hail, vandalism, etc.
- Broad commercial insurance – additional perils, such as water damage, structural collapse, sprinkler leakage, and losses caused by ice, sleet, or weight of snow.
- Special commercial insurance – all types of losses except those the policy specifically excludes. Common special form exclusions may include losses from flood, earth movement, war, terrorism, nuclear disaster, wear and tear of equipment, and insects.
If you have any questions related to commercial property insurance, you can get in touch with our experienced insurers. You can also talk to us and choose the best type of coverage for your business and related assets.