Commercial Property Insurance
Commercial property insurance for business owners covers many types of losses and damages to a companies property. This type of coverage applies to a broad range of things listed as business property including:
Common Coverage Types for Business Property Insurance:
✓ Business Inventory
✓ Furniture and Equipment
✓ Personal Property and Property of Others
✓ Outdoor Signs
✓ Fences and Landscaping
✓ Business Interruption Coverage
In general, property insurance provides coverage for a wide variety of events such as a) fire, b) smoke, c) wind and hail, d) vandalism, and e) civil disobedience. Policies often list included or excluded coverages and some parts of coverage, such as earthquake or hail, may have separate deductibles than other parts of coverage.
Property and Casualty Insurance
Property and casualty insurance refers to the various lines of insurance designed to protect businesses from both legal liability and property damage. While commercial property and casualty is similar to homeowners insurance in many ways, their are more details and consideration for potential risks associated with the commercial side.
Property Insurance Rates and Types of Coverage
Commercial property insurance rates and premiums are typically developed by multiplying the value of the building or contents by a factor associated with the level of risk. Things that affect property insurance rates include the nature of the business, the location of the property, distance from nearest fire station and other public services, fire and theft alarms, and how the building is constructed. Property with higher risk of damage or claims will have higher rates per $1000 of coverage than lower risk properties.
Types of Property Coverage
There are 3 common types of property insurance coverage:
Actual cash value coverage is generally based on the value given to the property as listed on the policy. An example would be insuring a piece of equipment for exactly $10,000. Replacement cost coverage will pay the cost of replacing property regardless of depreciation or appreciation associated with the property (but only up to the limits listed in the policy). Extended replacement cost coverage will pay over the limits of coverage in the event constructions costs have increased. This typically applies to an additional 25% in excess over the limits.
How Much Property Insurance Do I Need?
The amount of property insurance you need depends greatly on your tolerance for risk and what you are willing to pay for coverage. It’s definitely not a good idea to over-insure your property because you will be overspending for insurance with little to no benefit in the event of a loss. The entire premise of insurance is to make you whole again after a claim or loss. Additionally, banks and lease agreements often have stipulate minimal amounts of property coverage required for businesses who have loans or lease a building.
The final thing to consider is your property insurance deductible. Be careful about setting your deductible too low when purchasing property insurance. Lower deductibles not only increase the cost of your business property insurance, but it’s often not worth turning in a claim on a small loss. Many companies with $500 deductibles don’t turn in claims for $750 losses. Why? Because its not worth the extra time and energy to file the claim and wait for a settlement. Additionally, many business owners don’t want the claim on the business loss reports because it may cause their rates to go up at renewal.
Start a Commercial Property Quote
It’s easy to get property insurance quotes for your business. Contact one of our commercial insurance Specialists today at (800) 900-8657, have a Specialist call you, or start your property quote online. At General Liability Shop.com, we’ve got your property covered. Get quotes from more than 35 insurance companies from a national agency specializing in commercial insurance coverage.