Running a successful business is not without its risks. Most business owners are proud of the work they do and the property they utilize to get the work done. Unfortunately, nature is not always so understanding. Every year, business owners have their business property damaged or lost as a result of events completely beyond their control.
Commercial Property Insurance is for any business that has physical assets. Although your building or other business property may not be making money for your company, its loss could still be very costly.
This insurance type is all about insuring your building, the physical assets inside of that property, and many other types of physical objects owned and used by your business. Whether that property is small office furniture or a large warehouse, any property your business owns should be protected.
Read on to understand if this type of insurance is right for your business.
Thankfully, this insurance policy is one of the simplest and most common forms of business-centered policies available. Commercial Property Insurance is designed to cover most physical properties your business owns. The focus of this insurance is to help businesses recover quickly after suffering property damage or loss.
All types of business property are covered by this type of insurance policy. Many businesses choose to purchase this policy as insurance on a physical building. However, other types of business property can be covered by this policy, including physical copies of company records which are often stored onsite. All costs related to the business property can be covered. The cost of rebuilding after a building has been destroyed, or the cost of replacing property that has been completely lost are common coverage areas.
Any revenue that is lost, and that is insured by this type of insurance, can often be recouped. This insurance is designed specifically to help a business continue operating after property loss or damage.
Getting Into the Details...
Coverage for natural disaster events that result in a loss. Example: Cover the cost of repairs for a building damaged as the result of a hurricane or tornado
Coverage for property that is damaged as the result of equipment failures. Example: Covers the cost of repairs or revenue loss if a piece of equipment fails and damages other property
Coverage for lost revenue as a result of property damage or loss. Example: Will provide a revenue stream while repairs are completed on damaged property, or during the time required to find a replacement
Coverage for the cost new construction after property loss. Example: will cover the construction cost incurred when replacing insured property or repairing damaged property
This insurance may come in handy if:
Commercial Property Insurance is specifically limited to property owned by the business. This property must have either been purchased by the business or have been purchased from someone else and had its ownership transferred to the business. This property should be essential to the operations of the business, even if it is not directly tied to the revenue stream. This type of insurance does not cover commercial vehicles. Although commercial vehicles could be considered “property” of the business, separate insurance exists for commercial vehicles due to separate regulations.
Commercial Property Insurance covers everything you own that fits under the definition of a “physical asset." This can be anything, as long as your company can prove that the item was purchased for business purposes, or that its use is solely business-related. Even if your company only stores physical documents, these too could be at risk. Office equipment, buildings, and mechanical equipment are only examples of what can be covered. Speaking with an insurance agent can help business owners determine the full list of items their business owns that will be covered.
Not all businesses utilize physical assets as part of their daily operations. For example, a small business that operates online may not have many physical assets beyond computers. However, those computers would be considered business property. As such, their loss could be costly at best and potentially catastrophic.
Whether property is lost or damaged as the result of a natural disaster, criminal mischief or any other event beyond your control, any loss will result in a financial burden. This type of insurance will cover the cost of replacements, repairs, lost income, building costs, and can even cover higher costs that due to inflation.
Cost of this type of insurance will depend on several factors. The value of the building and the assets inside of it will determine the cost. A set rate is often determined by calculating the total value of these assets, and will typically include a risk factor. Different business properties have different risk factors, dependent upon their location and the nature of the business.
There are many factors that will affect the cost of your Commercial Property insurance. First and foremost, the coverage limits that you have on the property will affect the premium. Certainly, the higher the limit the higher the premium. Additionally, any claims history and the higher the risk your business presents will affect the cost. For example, if you are selling fireworks indoors, that would present more risk than a clerical office setting.
While it sounds like the words all-risk would mean that everything is covered, it is important for you to know that is not the case. All-risk means that all perils are covered unless they are excluded. It is critical for you to pay attention to the exclusions within your Commercial Property policy. There are some common exclusions to look out for which include flood, pollution, damages by rodents or pests, wear and tear, and earth movement.
As discussed above a common Property insurance type is all-risk which will cover most physical damage claims to your property. The other type of Property insurance is named-peril coverage which is less comprehensive and will only provide coverage for specifically named perils like wind, fire, and business interruption.
The word premium can be confusing as it is defined as many different things in the dictionary. For insurance purposes, though, it means the cost of the policy. The annual policy premium is the amount you will pay for the Property insurance for the year.
The directors and officers of a privately-held company are at risk from suits by a variety of different people, such as customers, competitors, suppliers and government agencies. However, the greatest number of lawsuits come from the employees of a company itself. Directors and Officers Insurance covers your management team, should things go south.
EPLI is a liability insurance that covers wrongful acts, such as wrongful termination, discrimination, sexual harassment and retaliation. This insurance may also protect your business from other employee-related claims, such as deprivation of a career opportunity, defamation, invasion of privacy, failure to promote, and negligent evaluation.
This insurance protects goods in transit on land, as well as the property of others that is on your premises or being transported from your premises. An Inland Marine policy is crucial if your business ships goods of any kind on land.
This insurance covers a business should they need to recall one of their products. Product Recall Insurance will cover the cost of getting a defective product back under the control of the manufacturer or merchandiser that would be held responsible for bodily injury or property damage due to the existence of the product.
This insurance will provide you with coverage if you are throwing a special event. Special Events Insurance will cover claims of bodily injury, property damage and provides coverage for any contractors you hire.
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