4 Things You Should Know About Commercial Property Insurance

Insurance companies have different forms of commercial insurance. Understanding the available forms of coverage can help you protect your business best. Below are four things you should know about commercial property insurance.

1. Coverage Goes Beyond Real Estate

Commercial property insurance will help you repair or rebuild your business premises in case of damage, just as homeowners insurance can help you rebuild your home. However, commercial property coverage goes beyond real estate property. The coverage also extends to:

• Your business equipment, such as your printers, office furnishings, and computers
• Your business documents, such as paper files
• Your business inventory, if you deal in physical goods



Therefore, do not assume you don't need commercial property insurance because you don't own your business premises. You need commercial property insurance if your business owns physical properties that you might lose to damage or theft.

2. Other Parties May Require It

Every business that wants to protect its assets should have property insurance. However, other parties might require you to carry property insurance even if your assessment shows you can do without it. Below are examples of parties who might require insurance from you.

Your Landlord

Real estate owners use landlord insurance to protect their investments. For example, if you lease your business premises from a real estate investor, the investor probably has landlord insurance to replace the roof in case of storm damage. However, the landlord's insurance doesn't extend to your business assets.

Some entrepreneurs try to claim compensation from their landlords after a disaster. For that reason, many landlords require property insurance from their tenants. That way, you don't seek compensation from a landlord if a disaster damages your assets—you seek compensation from your insurance carrier.

Mortgage Lender

You may also need property insurance if you buy commercial real estate on a mortgage. Say a dentist uses a mortgage to buy a commercial block for their dental practice. The mortgage lender will likely require property insurance from the dentist. The coverage protects the lender's stake in the property if the property suffers damage and the dentist defaults on the mortgage repayments.

3. Available in Several Forms

Commercial property insurance is available in multiple forms. The major ones include:

• Business income – Compensates you for lost business income if a disaster shuts down your business. For example, the insurance may reimburse you for lost income if you cannot operate on your premises after a fire outbreak.
• Extra expense – Pays for your business expenses incurred during a disaster or associated repairs. For example, it may help you operate from temporary premises as you repair your usual premises after storm damage. 
• Inland marine – Applies to business assets away from your usual premises. For example, a building contractor can use inland marine insurance to protect equipment in transit between contraction sites.

Consult an insurance agent to help you determine the coverage your business needs.

4. You Can Buy a Standalone or Package Policy

You can buy commercial property insurance as a standalone policy or as part of a business owner's policy (BOP). BOP is an insurance package combining multiple forms of insurance under one policy. Many small businesses find it inexpensive to buy a BOP bundle instead of individual insurance policies.

BOP typically offers general liability and property insurance, but many carriers allow you to customize the package for your business. For example, you may include cyber insurance in your BOP if your insurance company allows it.

Mike Pierce Insurance has practiced as an independent insurance agent for over 50 years. We understand the local insurance market. Contact us, and we will use our extensive knowledge and experience to help you buy the best insurance package for your business.