Commercial property insurance

Property insurance is crucial for any business that sells, distributes, or manufactures goods. For example, if a pipe bursts in a grocery store, a commercial property policy would cover the cost of replacing all of the food that had to be thrown away.

If you rent a commercial space, you can purchase a policy that covers only owned items in the space. You may also need to insure equipment that you lease, depending on your arrangement with the owner.

Tech companies rely on their computers and other expensive electronics on a daily basis.

If a thief breaks into your office and makes off with thousands of dollars' worth of monitors, PCs, and laptops, a commercial property policy will cover the cost of replacing the stolen items.

Construction companies and contractors rely on several different types of specialized property insurance to cover their risks. They might need contractors tools and equipment coverage to protect power tools that travel to different job sites, or builder's risk insurance to cover a structure in progress.

If a fire destroys your tools and equipment, or someone vandalizes a construction site, these policies will help you recover financially.

Commercial landlords, property managers, and other real estate professionals likely need a policy that covers the actual building and all contents, including mechanical and electrical systems.

If you rent a space, you may want to ask your tenants to carry insurance to make sure their own items are protected as well. You should also consider purchasing lessor's risk only (LRO) insurance to protect yourself from legal fees if an accident happens on your property, as well as a building insurance, which covers property damage to buildings, structures, and completed additions that you lease to commercial tenants.

Commercial property insurance covers property damage caused by named perils. That includes burglaries, vandalism, fires, and windstorms. But it doesn't cover normal wear and tear, natural disasters, and many other types of risks.

Typically, this policy covers your building and business personal property kept at that location. If you don’t own or rent a building or other commercial space, the policy can cover assets stored at a designated location. These are usually places like your home or a storage unit.

Commercial property insurance coverage offers policyholders a choice of receiving cash value or replacement value for stolen or destroyed items. An actual cash value policy costs less, but pays out only what the item is currently worth. Due to depreciation, you might have to pay money out of pocket toward the replacement cost.

Opting for replacement value means that the carrier will reimburse the lost equipment with a brand-new equivalent. While replacement value policies usually have a higher premium, the extra cost may be beneficial for businesses that depend on state-of-the-art equipment, such as many IT companies.

Yes. Many companies that own or rent their workspace bundle their property coverage with general liability insurance in a business owner's policy (BOP).

A business owner's policy comes in handy if your landlord requires you to have renter's insurance, or you need general liability coverage in order to secure a contract with a client. It typically costs less than if the policies were bought separately.

Similar to a BOP, a commercial package policy (CPP) also packages property and liability coverage, but offers more flexible protection options and is generally purchased by high risk small and medium-sized businesses.

There are several types of liability insurance products that help pay for different kinds of lawsuits. They include:

• General liability insurance for common customer, copyright, and defamation lawsuits
• Professional liability insurance for disputes over the quality of your work
• Cyber insurance for protection against data breaches and cyberattacks
• Employment practices liability insurance for violations of employee rights

Chat with an insurance agent to find out what other bundles might be available for your business.

Commercial property insurance has some coverage exclusions. For example, it usually doesn't pay for property damage caused by natural disasters like earthquakes, hurricanes, tornadoes, and floods. If you need coverage for these events, you can add an endorsement to your policy. 

It also doesn't cover damage caused by short circuits, power surges, or loss of pressure. An equipment breakdown endorsement extends coverage to damage caused by these events.

Additionally, it won't cover business vehicles. If your business owns a company vehicle, you’ll typically need to purchase commercial auto insurance to comply with state law.

You can add endorsements (riders) to your policy to fill other gaps in coverage too. Check with an Insureon agent to make sure your insurance policy includes the type of coverage you need.

If you want to learn more about this policy, you can find additional answers in our frequently asked questions about commercial property insurance.

If there are any additional questions you have about coverage, you can also contact an Insureon agent.