Commercial Property Insurance

If the worst happens and a fire breaks out and damages your commercial property, destroying all assets in the process, your ability to rebuild your business is generally dependant on having sufficient property insurance cover. This type of financial claim cover can also provide assistance for theft and vandalism, and can help cover the additional costs of repairing property or replacing whatever you have lost.

Coverage Plan

The amount of commercial property insurance you will need depends on your personal business requirements. You may be covered for property damage, or for the type of disaster or event that affects your business. Some property insurance policies cover building structure and general inventory, office equipment and supplies. Other policies may provide additional coverage for loss of revenue, on the property, and irreplaceable account records.

Perils

Weather-related events like flooding or human-related incidents like robbery are known as perils. These type of events are covered by either a named-perils policy – which provides insurance coverage solely for the type of event named – or an all-risks policy – that offers coverage for all types of events except those named on the policy. An all-risks policy will have higher premiums but will provide sufficient insurance protection to cover most business needs. Additional insurance cover can be added to existing policies, to provide protection for excluded events.

Businesses that are not able to make use of property coverage provided by a Business Owner’s Policy (BOP) can ensure commercial property is sufficiently covered by a customised insurance package.

Premiums

Insurers will work out the statistical frequency of major events like fire, flood damage and theft. The basic risk to your commercial property will be assessed and determined by the type of building structure, existing property safety measures and the business premises’ proximity to other high-risk buildings.

Premiums are assessed by property valuation and a commercial property insurance policy may provide coverage on a replacement cost basis, or provide an Actual Cash Value (ACV) reimbursement.

Insurance Coverage Guide

Commercial property insurance will provide coverage for:

• Buildings and other business structures
• Mobile property – construction equipment and business vehicles
• Machinery
• Inventory
• Office furniture, computers, equipment and supplies
• Money or financial accounts on premises
• Company documentation
• Any leased equipment.

Considerations

Before acquiring commercial business property it is worth paying careful consideration to the building or structure’s construction. Building materials such as steel and brick will provide a more worthwhile investment than a building material like wood.

As with any type of insurance coverage, carefully checking all documentation will provide the business owner with details of any exclusions, restrictions and additional coverage available. It also pays to check all policies before renewal, to establish whether or not your business needs have changed. Carefully checking policy details will also enable the business owner to terminate any existing policies that may no longer be required.

Installing fire extinguishers, smoke alarms and other forms of deterrent will help business owners reduce the cost of insurance premiums. Insurance providers should also be informed of any changes to business premises.