Building Owner Signing Commercial Property Insurance Policy

Commercial Property Insurance 101

Posted by Tyler Walsh on February 3rd, 2021

As a commercial property owner, you need to be prepared for whatever life throws your way — and that’s why commercial property insurance is an absolute necessity. With commercial property insurance, you can have peace of mind knowing that your business and its physical assets are protected. Should an unforeseen disaster strike, such as a fire, theft, vandalism, or another form of a covered loss, your commercial property will be covered for repair and replacement costs.

Let’s dive right in to explore what commercial property insurance is and why it’s important for your business.

Why Do You Need Commercial Property Insurance as a Commercial Property Owner?

When starting a business that involves purchasing a commercial property, you will be faced with the choice to purchase commercial property insurance (a type of commercial insurance). Because no business is the same, commercial property owners need to consider if property insurance is the right choice for them. It’s a good idea to invest in it if any of the following instances apply to your business:

  • You own your commercial office space
  • You rent the equipment needed to conduct business
  • You store inventory at your place of business
  • You manufacture a product
  • You own physical business-assets of value

After considering if any of these scenarios apply to your business, you can make a more informed decision about investing in commercial property insurances. While you might not have a lot of physical property, it’s important to consider all assets you might want to be protected, including data, electronics, equipment, and more.

What Are the Types of Insurance?

Now that you’ve determined if commercial property insurance is the right investment for your business, it’s time to narrow down which type is best for your particular situation. There are three different tiers of commercial property coverage — enabling you to select the level that best suits your needs. You can select from a few types of commercial property insurance:

  • Basic form coverage – As the most basic form of commercial property insurance, basic form policies offer your property the least amount of coverage. Any damage to your assets will be covered if the damage is caused by fire, windstorms, smoke, vandalism, lightning, aircraft and vehicle collisions, hail, and riots and civil commotion.
  • Broad form coverage – For slightly more coverage, broad form policies offer all the coverage from the basic level along with protection against damage from leaking appliances, structural damage, falling objects, and ice or snow.
  • Special form coverage – If you’re in the market for maximum coverage, special form policies will protect your business from any type of damage or loss (except for any forms specifically listed within the policy).

What Does Insurance Cover?

As we noted in the tiers of commercial property coverage, the insurance protects your assets and property from a multitude of damage. No matter the disaster that comes your way, you can rest easy knowing that your coverage protects your building, equipment, tools, inventory, furniture, and personal property. When browsing various insurance plans, you’ll notice that most commercial property coverage policies cover the following:

  • Theft of your products or assets (however, employee theft typically is not covered)
  • Damage from some natural disasters, such as fire and storms
  • Damage to digital assets, including data breaches and hacks
  • Non-business related personal items left on the property

The list might not seem long, but there is a wide variety of scenarios that would be considered covered — saving you a lot of headaches and stress if your property ever falls victim to any sort of damage. While commercial property insurance is a great option for all businesses, small businesses or startups need to consider coverage. Commercial property insurance enables you to keep your business afloat if a disaster strikes during a time when cash might be low.

What Doesn’t Insurance Cover?

While commercial property insurance offers your business protection from a range of losses, there are some forms of damage that it does not cover. Before signing up for coverage, it’s important to get a full understanding of what is covered and what is not so you have a clear picture of how your business will be protected. If something isn’t covered in a standard property insurance policy, you might have the option to get it added for an additional fee — this is why it’s important to know what isn’t covered versus what you want to be insured.

Here are a few of the standard forms of damage that are not covered under commercial property insurance:

  • Damage from a natural disaster, such as a flood or earthquake
  • Damage to commercial vehicles used for business purposes (this would be covered under your automotive insurance policy)
  • Damage from environmental disasters, such as oil spills, pollution, etc.
  • Equipment breakdown from reasons other than externally caused damage
  • Loss of income should your business be shut down for some time
  • Theft of physical cash from the premises
  • Defects in your business property

While these are the most common instances of damage that aren’t usually covered by commercial property insurance, no providers are the same. It’s important to thoroughly read through the policy to understand the specifics of how your business will be affected if faced with disaster.

How to File a Claim When Property Damage Occurs

Depending on the damage you’re faced with, your first step to file a claim will be to call the authorities or your insurance provider. For instance, if your business was vandalized, you will want to call the authorities first. If the authorities don’t need to be involved, calling your insurance company would be the first step.

Your insurance provider will likely have you:

  • Capture photographs and/or videos of the damage to add to the claim
  • Compile an itemized list of the property and assets that were damaged
  • If available, gather receipts for the damaged property
  • Document anything else that could be of value to your insurance claim

Once you have all the necessary documentation, you can submit your claim. Your specific insurance provider will be able to offer you specifics based on your coverage and guide you through the claim process.

How a Commercial Property Manager Can Help

If your commercial property experiences damage, a commercial property manager can handle the heavy lifting of putting together the claim, dealing with your insurance company, and scheduling the necessary repairs and replacements. With Price Commercial Management, you can have peace of mind knowing that your properties are in good hands.

If you are looking for an experienced commercial property management company, contact Price Commercial Management today.

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