Commercial property insurance pays to repair or replace business assets that are stolen or damaged. It also covers fire or water damage to your building or equipment.
Your policy may include actual cash value or replacement cost valuation. It might offer a named perils or an open perils coverage option. You might also add on options like glass coverage or inflation protection.
Basic Coverage
Many businesses need commercial property insurance to cover the value of their business assets. Working closely with your provider to ensure you’re getting the right coverage to meet your needs is essential. For example, you may want a policy that covers actual cash value or replacement cost in case of damage. At the same time, some contracts, leases, and loans require a specific form of commercial property insurance.
An excellent place to start is by inventorying your company’s assets and determining the maximum value you’d like to insure it for. Then, you can decide whether a basic-form or broad-form policy is best. Lastly, special-form property insurance offers the most comprehensive protection.
Commercial property insurance Denver can be bought as a stand-alone or part of a business owner’s policy (BOP) that bundles it with general liability and sometimes business interruption coverage. Some insurers also offer additional types of property coverage as add-ons to a standard commercial insurance policy, including equipment breakdown coverage and flood insurance.
Building Coverage
Commercial property insurance protects a company’s buildings and physical assets, whether it occupies its own building or rents space in another. Typically included as a core coverage in business owners’ policy (BOP) insurance, the commercial property covers damage from fire, explosions, burst pipes, severe wind and rain, theft, and vandalism. Floods and earthquakes are generally excluded but can be added with specific endorsements.
The cost of a commercial property insurance policy depends on the value of your business’s physical assets and how much coverage you want. Location and construction are other important factors; for example, a building built with fire-resistant materials and up-to-date plumbing and electrical systems will likely be less expensive to insure than an older brick or stone building with a wood frame.
Insurance companies also offer different coverage forms, such as particular form, broad form, and actual cash value coverages. Choosing a particular insurance policy – all-risk coverage – is more expensive but provides the most comprehensive protection against loss and damage.
Business Personal Property Coverage
The business personal property section of commercial property insurance protects the firm’s equipment, tools, and supplies. This portion of the policy would reimburse a graphic artist for their trusty computer or pay to replace a backhoe destroyed by a storm. It also covers leased personal property for which the company has a contractual responsibility.
Depending on the policy, this can include everything from basic, broad, or particular cause of loss coverage. The last is a more expansive form that usually includes all direct physical damage except for what’s listed in the exclusions, such as earthquakes and floods.
It’s essential to take a complete inventory of all the property that belongs to the company to accurately determine its value and the amount of coverage it needs. This can help prevent underinsurance, and a good agent will walk clients through different ways to value their property so they are correctly insured.
Additional Coverage
Commercial property insurance protects business owners from potentially losing their valuable assets. It can be written as a stand-alone policy or often included in a larger bundle of coverages called a business owner’s policy (BOP).
Some lenders require commercial property insurance for those seeking commercial financing. Even home-based businesses should consider it, as they may not be covered by homeowners’ or renters’ policies. Third parties like landlords and mortgage lenders may also require it as part of their contracts with the business.
A business needs to understand the specific coverages available under commercial property insurance. A few key considerations include the differences between actual cash value and replacement cost policies and whether the policy offers named or open perils coverage. Additionally, a business should inventory its assets to determine the correct limit needed. Other coverages to consider include glass coverage and an inflation guard. These are additional options that can increase the price of a policy.
