What is commercial property insurance?
Whether you own your building, lease studio or office space, or work from home, protecting the place where you conduct your business is of the utmost importance to all business owners. That’s why a commercial property insurance policy is crucial when it comes to covering loss or damage caused by incidents such as theft, vandalism, fire, explosions, burst pipes, and storms.
What does commercial property insurance cover?
Commercial property insurance coverage can protect not only the physical location of your business, but all of the assets inside, including:
- Furniture, equipment, and supplies
- Money and securities
- Records of accounts receivable
- Leasehold improvements and betterments
- Electronic data processing equipment (computers, etc.)
- Valued documents, books, and papers
- Mobile property (construction equipment, etc.)
- Property in transit
- Satellite dishes
- Signs, fences, and other outdoor property not directly attached to the building
- Intangible property (goodwill, trademarks, etc.)
In the event that an incident or disaster causes your business to halt operations for a time, property insurance can also help cover lost income and employee pay. It does not, however, cover certain risks such as floods or earthquakes unless they are perils added to your policy.
What are the different types of coverages?
Business Property Insurance
Your business property insurance policy can cover a wide range of assets such as those listed above, which is why it’s important to take a complete inventory of your property to determine the necessary level of coverage.
It’s also helpful to understand the market value vs. replacement cost of your assets. A typical policy will provide the replacement cost value for your building and/or assets, which is the necessary cost to rebuild, as well as the actual cash value for your business property, which is the value of your property at the time it was damaged.
Business Interruption/Business Income Insurance
Any incident on your property could temporarily shut your business down, disrupting your income and your ability to pay your employees. With business interruption insurance (also known as business income insurance), you can minimize the effects of this setback.
Business interruption coverage typically covers profits that would have been earned based on previous financial records, as well as operating expenses that still need to be paid while your business is not operating, such as utilities.
Tenants’ Improvements & Betterments Insurance
If you rent the space where your business operates and make improvements over time, that investment needs to be protected. However, it is often unclear who is actually responsible for those improvements in the event that the building is damaged or destroyed – the tenant or the landlord.
Tenants’ improvements and betterments insurance is one way to cover this risk, allowing businesses that rent their space to insure any improvements they make, especially if the landlord specifically excludes them when insuring the building itself.
Equipment Breakdown Insurance
Most, if not all, businesses depend heavily on their equipment, from technology like security systems and electronic cash registers to critical utilities like boilers and hot water units. As such, when any of that equipment breaks down, business owners can be saddled with both the costs of repairs and the loss of income if operations come to a halt.
Equipment breakdown insurance covers these losses, including repairs and replacements, service and income interruptions, the loss of perishable goods, data restoration, and even the cleanup of hazardous substances released in a covered loss.
Inland Marine Insurance
A standard commercial property policy may not cover the loss of certain property in transit such as antiques, paintings, statues, jewelry, items used for sales presentations or equipment you take to a jobsite – and this is where inland marine insurance comes in handy.
Contrary to what the “marine” in its name implies, inland marine insurance covers cargo transfers that take place on land. This includes losses due to theft, vandalism, breakage, and other damages that may take place in transit.
Ocean Marine Insurance
While we’ve come a long way from wooden ships, today’s vessel owners still face a significant amount of risk. Any business involved in shipping at sea needs ocean marine insurance to protect not only commercial vessels, but other property such as tugboats, barges, and even fixed properties like offshore oil rigs.
Ocean marine insurance is actually comprised of three areas of coverage:
- Ocean Marine Hull Coverage, which protects the vessels themselves;
- Ocean Marine Cargo Coverage, which protects waterborne cargo in transit;
- Ocean Marine Liability Coverage, which protects against third-party liabilities such as bodily injury, property damage, and wreck cleanup and removal.
Jewelers Block Insurance
A jeweler’s inventory is an invaluable asset, yet it is not covered by a standard commercial insurance policy. To protect your inventory of raw materials, precious metals, jewelry and other valuables, a jewelers block insurance policy is a must-have. It covers all perils of the jewelry trade, including customers’ property that is entrusted to you, inventory being transported to tradeshows, and inventory being shipped via air freight or armored services.