Insureon Blog

How to Get Affordable Commercial Property Insurance

1. April 2014 08:25

Darkened kitchen with invading figure

Commercial Property Insurance is one of the building blocks of your business protection plan, especially if you work in an industry that has specialty equipment, product inventory, or valuable items (such as computers, electronics, and media devices). And if you own your commercial premises, you have even more incentive to protect your investment with adequate coverage.

But how do you go about finding a business Property policy that fits your needs and your budget? Here are some tips for finding an affordable plan:

Ensure Your Small Business Property is Actually Covered

Some small-business owners may think their other policies cover their business essentials. But what they may not realize is how limited Landlord’s Insurance, Renter’s Insurance, and Homeowner’s Insurance really are when it comes to business protection.

For instance, if you rent commercial property from a landlord, don’t assume that Landlord’s Insurance covers your equipment, furnishings, or products. This policy only covers the rental property and certain structures, such as a deck, garage, or shed. That means all your commercial gear is still exposed if you don’t have your own coverage for the building’s contents.

Unfortunately, Renter’s Insurance and Homeowner’s Insurance can’t fill this gap, either. These only cover personal property, and both typically have exclusions for items used for business.

This is especially worth noting if you run a home-based business. Without the appropriate riders to your Homeowner’s policy, you may leave yourself exposed to potential losses. (Learn more about the shortcomings of Homeowner’s Insurance with our infographic “Is Your Home-Based Business Covered?”)

The answer to these coverage gaps is a commercial Property Insurance policy. If you don’t own your building and only need to cover its contents (e.g., fixtures, furniture, office equipment, supplies, and inventory), you could save money on your policy by only purchasing building contents or equipment insurance.

If you did invest in commercial real estate, know that your policy can protect your building against damage and loss, too. When a covered event occurs, you’ll have the funds to repair your building and replace your insured items.

Covered Commercial Property Insurance Claims

Common Property claims involve loss or damage caused by…

Say a fire breaks out in your office building thanks to an old toaster in the break room. Depending on your policy’s stated limits, Property Insurance can pay for…

Understand the Difference Between Replacement-Value or Actual Cash-Value Coverage

You can usually choose to insure your property at its replacement value or its actual cash value (ACV). The option you decide will affect the premiums you pay for your Property Insurance. Here’s what you need to know to make an informed decision:

Replacement-Value Benefits

If you choose a policy with “replacement-value” coverage, your provider will compensate you with enough money to replace your insured items with brand new pieces in the event of a covered property claim. Because you receive enough compensation to buy new items, this option typically comes with a higher premium. However, it’s an option that’s worth exploring if…

Replacement-value coverage will pay with “like kind or quality” up to the stated limit in your policy. So if, for example, your office building had carpeting, the policy isn’t going to replace the damaged carpet with imported Italian tile.

Actual Cash-Value Benefits

If you choose a policy with “actual cash-value” coverage, you’ll receive compensation that equals the depreciated value of the damaged asset (depreciation is the loss in value of the property due to time, wear, and tear). If you can easily find used replacements for your business items, you may want to choose this coverage so you can reduce your premium costs. 

Know How Valuable Your Items Really Are

Say a thief nabs your company laptop. Your first instinct may be to think of the event as an expensive nuisance. Sure, no one likes shelling out $1k for a new MacBook, but you could ostensibly do it. But what if you found out the ordeal could potentially bankrupt your business – especially if you have sensitive information housed on your stolen device?

According to a Ponemon Institute and Intel study that examined 138 lost laptop situations, businesses spend an average of $49,246 when a laptop is either lost or stolen. In outlier cases, the number climbed to as high as $975,527.

If your manager’s laptop is lost, it could cost you an average of $60,781. And a director's laptop? $61,040.

These costs aren’t about the replacement value of the device. Rather, they are a reflection of the loss of the information contained on them. It’s all the more reason to make sure your property is adequately protected.  

Reduce Your Business Property Insurance Rates by Managing Property Risks

Another way to save money on your Property policy is to implement a solid risk management strategy. Some insurance providers offer discounts if you try to reduce your risk exposures. Some cost-saving preventative measures may include…

Another way to save money on your business’s Property Insurance is to purchase a Business Owner’s Policy. This plan bundles together Property Insurance and General Liability Insurance for less than you’d pay for each policy individually. To find out if your business is eligible for this deal, apply for a Business Owner's Policy quote online.

This post is the last of our ongoing series about saving money on business insurance. For more insurance savings tips, visit

know your business risks


Insurance Savings Tips | Property Insurance | Risk Management | Small Business | Small Business Risk Management | Tips for All Small Businesses

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