Property Insurance Coverage: Let's Get Physical
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How Does Commercial Property Insurance Work?

Some say the material world is fleeting and ephemeral, that possession is a mere illusion. But chances are, you operate your business on less mystical terms, and you recognize the need to protect your material assets from theft and damage. That's where Commercial Property Insurance helps you. It covers expenses related to the repair and replacement of the physical assets your business owns and rents.

If computers go missing, if a fire destroys your office, if that brand-new 3D printer accidentally falls out of the third-story window, your tailored Property Insurance policy can spare you the replacement costs. (And if you do operate your business on mystical terms, then such losses are not losses at all, but simply momentary lessons on the transience of the universe.)

How Property Insurance Works

So what does business Property Insurance actually cover? With a customized policy, you can insure nearly every physical asset that your business owns or rents, including…

  • Office space.
  • Fixtures.
  • Furnishings.
  • Inventory.
  • Supplies.
  • Equipment.

In the event that any of the above are lost or damaged because of fire, theft, windstorms, or vandalism, your policy can compensate you for replacement costs. (For company vehicles, though, you'll need Commercial Auto Insurance.)

There are two important things to keep in mind when considering what kind of Property policy you need:

  • Replacement value. Assets can be insured for their full replacement value or their actual cash value. A replacement-value policy comes with higher premiums, but it pays out what you need to buy brand-new replacements. The cash-value policy has lower premiums, but it only pays out the item's depreciated value. Consider which option is more cost-effective for your business.
  • Renting vs. owning. If you rent an office, you can purchase a policy that only covers the contents of that space. You may also need to insure equipment that you lease, depending on your arrangement with the owner. If you own your business space, you can purchase a policy that covers the actual building and all its contents, including mechanical and electrical elements.

Let's Get Real: Customizing Your Property Coverage

Business Property Insurance usually covers repair and replacement costs up to a stated value. But every industry and business is different. There's no one-size-fits-all Property policy. For this reason, business Property policies come with tools to tailor the policy to your needs, including equipment and real estate.

How to Tailor Your Property Insurance Policy with Schedules

The first way to customize your Property policy is through "schedules." These let you list specific items of property on the insurance form for coverage. You may own particularly expensive pieces of equipment that, if damaged and in need of replacing, would exceed your coverage limit. Adding these scheduled items increases your premiums but ensures that you have the coverage you need in case the worst happens.

Many businesses underestimate the full cost of replacing their equipment when disaster strikes. A good idea is to schedule items that are both costly to replace and crucial for day-to-day business. It can save your business from losing valuable revenue and time in the aftermath of an event by quickly getting you the funds you need to resume operations.

How to Tailor Your Property Insurance Policy with Riders

The other tool that lets you tailor your policy is a "rider," or an endorsement. Riders amend your policy so that it covers unique types of property and losses that your policy excludes. For example, most Property policies exclude coverage for damage caused by earthquakes and hurricanes, so you could get a rider to cover these types of losses. Talk with your agent to see if any of your assets need additional coverage or special consideration in a policy.

With a tailored Commercial Property Insurance policy, you can protect your business's assets and keep the revenue flowing should something get stolen, lost, or damaged. Fill out an application with insureon to receive free Property Insurance quotes, or contact an agent to discuss your business insurance needs. There's nothing mystical about it.

(And if you were expecting a reference to Olivia Newton-John's hit single "Physical" anywhere in this article, consider this another lesson in the elusive nature of human expectations.)

Commercial Property Insurance: Further Reading