What does commercial property insurance cover?

Commercial property insurance protects a building owned by your business against fire, vandalism, and other types of damage.

Example: A fire starts in an adjacent building and spreads to your IT consulting office. Business property insurance helps pay for the office's renovation after the fire.

The furniture and fixtures inside your owned or rented building are protected by commercial property insurance.

Example: Someone breaks into your restaurant and vandalizes the dining area, breaking chairs and causing widespread damage. Your commercial property insurance helps pay to repair broken items and replace destroyed furniture.

If your business’s supplies or equipment are damaged, lost, or stolen, commercial property insurance coverage can help repair or replace the items.

Example: A thief breaks into your computer repair business and steals thousands of dollars in computers and electronics. Property insurance pays for replacement of the stolen items.

Commercial property insurance protects the inventory of retailers and other stores.

Example: A pipe bursts in a grocery store and a large portion of the store’s inventory is ruined. Commercial property insurance pays for the replacement of destroyed inventory.

Inland marine insurance protects business property in transit or equipment that moves to different worksites. It often covers your business property no matter where you take it.

Example: A lawn care company brings its landscaping tools and equipment to its clients' homes and offices. Because the items are in transit, they're exposed to more risk, necessitating inland marine coverage instead of standard property insurance.

General liability insurance is the policy that covers property belonging to your customers and clients.

Example: A door installation company accidentally breaks a customer's window when carrying a door through a home. General liability insurance helps pay to replace the window. It could also cover legal costs if the customer sued over the damage.

Business interruption insurance can cover costs when a disaster forces a business to close temporarily. It can pay for lost revenue, day-to-day expenses, and the cost of moving to a temporary location.

Example: A fire at a tax preparation company causes the business to close for a week. Property insurance covers the cost of renovation, while business interruption insurance helps cover normal operating expenses during the closure.

Janitorial bonds reimburse your clients if an employee steals items or money from them. They are a type of fidelity bond, which protects your business and its clients against dishonest employees.

Example: An employee at your house cleaning business steals jewelry from a client's home. The cleaning company has a janitorial bond, so its insurance company reimburses the client when the theft is discovered.

Equipment breakdown coverage pays to replace malfunctioning equipment after a mechanical or electrical failure. You can add this extra coverage as an endorsement on your commercial property insurance policy.

Example: The ice cream machine at a fast food restaurant breaks down. Because the restaurant has equipment breakdown coverage, its property insurance pays for the repair.

If a burst pipe or other incident destroys customer records, your business could have trouble collecting outstanding customer payments. Commercial property insurance doesn't cover the extra cost of recovering these payments unless your policy has an accounts receivable endorsement.

Example: A fire at a landscaping business destroys customer payment records. To find out who owes what, the business hires a temporary accounting professional – paid for by the accounts receivable endorsement on its property policy.

Yes. Many companies who 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 liability coverage in order to secure a contract with a client.

BOP not only includes both property and liability insurance in one policy, but it typically costs less than if the policies were bought separately.

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.

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