If you own or lease your business's location, you should have a Commercial Property Insurance policy.
Also known as Business Hazard insurance, this Ultimate Guide covers what Commercial Property Insurance is, what it covers, and who needs it. We'll also recommend where to look for competitively priced insurance.
What is Commercial Property Insurance?
Commercial Property Insurance protects a business against accidental damages, vandalism, loss of the physical building and assets, as well as the repair or replacement of the building and its contents.
Businesses that rent or lease a commercial space, or other essential business equipment, are usually required to hold a Commercial Property Insurance policy in their agreement.
A Commercial Property policy can be purchased as a stand-alone insurance policy, or in a Business Owner's Policy (BOP).
What Does Commercial Property Insurance Cover?
Commercial Property Insurance covers two things: the building, and the building's contents.
It will cover the cost (up to the amount of your policy) of repairs and replacement of the structure that your business occupies as well as the items inside (equipment, inventory, raw materials, etc.).
However, depending on the policy, your Commercial Property Insurance may or may not cover natural disasters. You can add a clause, called a rider, to cover damages due to fires, earthquakes, hurricanes, tornados, floods, and other natural disasters.
Since there's variation between the aforementioned natural disasters, be sure your policy states the specific coverage for a natural disaster rider. For instance, if your building is flooded but you only have a rider for fire damage or earthquakes, your policy will not cover the costs of repair or replacement.
What Doesn't Commercial Property Insurance Cover?
Commercial Property Insurance does not cover damages caused to people, intentional damage, business interruptions, and some don't cover natural disasters unless they are specifically included in a rider. Additionally, it does not cover property lost or damaged off-site.
What's a Situation You Would Need Commercial Property Insurance?
Commercial Property Insurance protects your business assets from a wide range of situations, such as theft, fires, flooding, accidental damage, and other situations depending on your policy.
How Much Does Commercial Property Insurance Cost?
As with all insurances, the price of premiums varies based on the coverage you need, the risk inherent to your industry, the location and value of your property all play a part in the final price. The median cost is $63 per month, but expect a range of $40-$100 per month.
Who Needs Commercial Property Insurance?
If your business rents or owns a physical space of any kind, you should have commercial property insurance. If you rent your space, your landlord (or a future landlord) may require you to have it. Moreover, it protects against the loss or damage of your physical assets.
Where Can You Get Commercial Property Insurance?
Commercial Property Insurance is available from numerous insurance providers —brick and mortar as well as online. We've partnered with Next Insurance and their rates start at just $25 per month. Use our partner link to get a free quote.
Learn more about 12 other types of insurance. Take a look at our Ultimate Guide to Selecting Business Insurance.
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