Cost of Commercial Property Insurance

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What is Commercial Property Insurance?

Commercial property insurance protects your business’s physical assets. That could include anything from an office space or storefront, to furniture or laptops. If your property is stolen or damaged, insurance will pay to replace or repair it.

This type of insurance can be vital to a small business, since you never know when disaster will strike. Claims covered under commercial property insurance include vandalism, theft, fire, and damage due to a storm or natural disaster. An unexpected event that destroys your office space or equipment could put you out of business temporarily or, depending on the extent, forever. With property insurance, you can rest easy knowing your most valuable items are protected.

There are many different types of commercial property insurance policies, and the one that fits your business will depend on a number of factors.

Factors that Impact the Cost of Commercial Property Insurance

Here are a few things an insurance company will consider when quoting your business a price for commercial property insurance:

  • Where your business is located
  • The size of the premises
  • How old your building or equipment is
  • The value of your property, including equipment
  • Security measures you employ

It’s easy to see how policies can vary greatly from business to business. A showroom of designer wares that’s located in a high crime area, for example, would probably pay more for commercial property insurance than a small gift shop in a safe neighborhood. A business located in an old building that could be more susceptible to fire would pay more than one in more modern facilities.

Additionally, when selecting a commercial property policy you may have to choose whether or not you want replacement-value coverage, which is more expensive, or cash-value coverage. With replacement-value coverage, your insurer will pay the full price to replace an item that is stolen or damaged beyond repair. With cash-value coverage, they will only pay what the property that you lost was actually worth. So, for example, if a computer you’ve had for three years is stolen and you have cash-value coverage, your insurance may not pay you enough to actually purchase a new computer. Which option you choose depends on the specific needs of your business.

Many small business owners qualify for a Business Owner’s Policy, or BOP, if they have less than 100 employees. A BOP combines commercial property and general liability insurance in one package, making it more affordable and convenient for a small business to gain two important coverages.

Cost Examples

Here are some examples of commercial property insurance policy premiums that a small business might pay, according to CoverWallet’s Advice tool:

  • An advertising agency with 20-49 employees in New York City could pay a premium of about $2,000 to $2,500 annually
  • An electronics store with 5-9 employees in Chicago could pay a premium of about $700 to $800 annually
  • A restaurant in Boston with 10-19 employees could pay a premium of about $3,000 to $3,500 annually
  • An IT consultancy with 1-4 employees in Houston could pay a premium of about $900 to $1,200 annually

The above are just estimates. As previously mentioned, premiums can differ greatly based on factors like the exact neighborhood your business is located in, how valuable your property is, and what steps you take to secure your property on your own.

To find out what commercial property insurance would cost for your business specifically, you should get a quote.

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