Frequently asked questions about commercial property insurance

Commercial property insurance is a type of commercial insurance that's recommended when your business has an office or other physical location.

This policy helps you recover financially after a fire, storm, burst pipe, vandalism, or similar incident damages or destroys your property.

It's sometimes referred to as business hazard insurance, or business renter's insurance for companies that rent a commercial space.

Commercial property insurance covers your building and business personal property (BPP), which includes tangible assets such as:

• Office supplies
• Furniture
• Inventory
• Computers
• Machinery
• Equipment

This policy only protects against property damage and theft at your business's primary location, which is why you may need additional coverage.

It depends. In many parts of the country, commercial property insurance does include hail and wind damage.

If you live in an area prone to hurricanes, a standard commercial property policy would likely have an exclusion for wind and hail damage. However, you might be able to add wind and hail coverage to a commercial property policy. Note that it will likely come with a higher deductible than the rest of your commercial property insurance.

Depending on your business location, parametric insurance is another option that may be available for natural disaster coverage. This policy relies on predefined triggers in the form of measurable events, such as an earthquake measuring 6.5 or higher on the Richter scale.

Commercial property insurance does not include damage from floods, for which you would need a separate flood insurance policy.

No, commercial property insurance only covers property at the business location listed on your policy.

To fully cover your property while it’s off-site or in transit, you might consider inland marine insurance. This policy covers products, tools, and equipment transported over land or stored off-site, including expensive equipment such as backhoes and bulldozers.

Contractor's tools and equipment insurance, also known as equipment floater insurance, is a less expensive type of inland marine insurance common in the construction industry. It covers tools and equipment while they are in transit or at a jobsite, and typically applies to items that are less than five years old and valued at less than $10,000.

Both inland marine coverage and contractor’s tools and equipment insurance are known as “floater” policies that cover your gear wherever it’s being moved or kept. They cover common risks such as fire, theft, vandalism, and water damage.

Your financial records can be covered through accounts receivable insurance, which is an endorsement that can be added to your commercial property insurance. It's sometimes called trade credit insurance.

This coverage insures your business against financial losses in case your accounting records are damaged or destroyed by a covered loss (theft, fire, etc.). Your covered losses may include the cost of record recovery, interest payments on loans, and collection costs such as hiring additional bookkeepers.

Yes, theft is often covered by commercial property insurance, along with other crimes involving damaged or destroyed business property. However, the specifics depend on your policy.

Employee theft is another matter. You'd need employee dishonesty coverage to protect against embezzlement, cash register theft, illegal electronic funds transactions, and other crimes committed by employees.

Business personal property insurance, also called business contents insurance, covers the items you use to run your business. Basically, it covers everything inside your building—but not the building itself.

Examples of business personal property include:

• Office supplies (calculators, binders, notebooks)
• Furniture (tables, desks, chairs)
• Furnishings (rugs, blinds, curtains)
• Computers (desktops, tablets, laptops)
• Electronics (smartphones, servers, routers)
• Heavy equipment (excavators, forklifts)
• Machinery (factory equipment, 3D printers)
• Inventory (food, clothing, household goods)

BPP coverage is typically included in commercial property insurance. If you don't have an office or building, then you can add this coverage to your general liability policy instead.

The amount of coverage you need for a building will vary depending on factors such as its size, value, and condition.

Here are a few things to keep in mind:

• It's more affordable to insure a smaller building than a larger one.
• Older, poorly maintained buildings may cost more to insure.
• Buildings in areas with higher property values are costlier to insure.

Basically, it comes down to the cost of a claim. Your policy limits should be sufficient to cover the cost of repairs from a fire, storm, or other damaging incident.

Any requirements for commercial property insurance will come from your landlord, such as commercial property insurance or small business renter’s insurance.

This coverage is often required for commercial leases. Your landlord may ask to see your proof of insurance before signing a lease for an office or other space.

Yes, it's important for new businesses to secure commercial property insurance if they have an office or other space. This is especially true if you have few resources to draw upon in the event of a fire or storm, which could otherwise bankrupt your business.

Business personal property coverage can insure valuable equipment, computers, or inventory if you don't need insurance for a building.

Your lease agreement might require you to carry commercial property insurance to protect your business's assets. In this case, you might see it called business renter's insurance, or commercial renter's insurance.

Even if your landlord has insurance, it'll likely protect the building but not your business assets, which is why it's important to secure coverage. Both commercial property insurance and business renter's insurance can be bundled in a business owner's policy, along with your general liability insurance.

If the loss of any of your business equipment would put you in a financial bind, then you might need commercial property insurance to protect your assets. If you’re considering general liability insurance, then you may want to purchase a business owner’s policy.

General liability insurance covers common business risks such as customer bodily injuries, damage to a customer’s property, and advertising injuries. A BOP combines general liability and commercial property insurance in one policy and is usually less expensive than buying these coverages separately.

If you run your business out of your own home, your homeowner’s insurance probably won't cover your business assets or liabilities. There's a chance your insurer will allow you to expand your coverage for business property, but it won't cover as much as a commercial property policy.

Most home-based businesses need business personal property coverage, which covers your business property at home. BPP insurance is automatically included as part of a commercial property insurance policy for businesses that operate at a location other than the owner’s residence.

Commercial property insurance costs an average of $67 per month for small businesses, or about $800 annually. About two-thirds of Insureon's customers pay less than $100 per month for this coverage.

Several factors determine the cost of commercial property insurance, including:

• Business location
• Age and condition of your business property
• Fire and security protection
• Type of business
• Value of your property
• Whether your policy has a coinsurance clause
• Coverage options, such as replacement value vs. actual cash value
• Your policy's deductible and limits
• Your claims history

By filling out our easy online application, which takes just a few minutes to complete, you can get insurance quotes from top-rated U.S. carriers. Once you find the right policy for your business, you can begin coverage in less than 24 hours.

We can email you an evidence of commercial property insurance form, which is the formal proof-of-insurance document that you need to show when you sign certain contracts or apply for professional licenses. You can also speak with one of our insurance agents about your business insurance needs.

Any business that owns or rents a business location will typically buy commercial property insurance. Landlords often require this coverage in order to sign a lease.

Businesses that own or rent expensive equipment or tools, such as construction companies, or have product inventory and other valuable assets, like retail businesses, buy commercial property insurance because it protects their financial assets in case of fire, theft, or a similar event.

Construction companies are encouraged to also purchase builder's risk insurance, a type of commercial property policy that covers damage to a construction project due to weather, fire, vandalism, or theft.

Our insurance agents have helped more than 450,000 businesses in a wide range of industries find the right coverage.

It's easy to adjust your policy. You might need to insure a new piece of equipment, such as a freezer, or drop coverage if you move out of an office to work from home.

To make changes, you'll need to contact your insurance agent. They can adjust your policy, answer any questions, and recommend the right coverage for your risks.

Most changes can take place even in the middle of a policy period, and your premium will be adjusted accordingly.

You can easily add more coverage to any policy with Insureon. Your insurance agent can increase the coverage amount on existing policies, and help you find the right coverage if you need additional policies.

Yes, you can cancel your commercial property policy at any time. Your insurance agent can help you with the process, either by canceling your policy or reducing it for coverage you no longer need.

If you cancel a policy before its expiration date, you could wind up paying more for insurance coverage later. Insurance companies typically charge higher rates for businesses that canceled a previous policy.

You also leave your business exposed to financial losses if you cancel your coverage.

Commercial property insurance, also known as business property insurance or business hazard insurance, insures your business property from losses such as fire, damage, and theft.

Business liability insurance refers to several types of liability policies that small business owners use to financially protect themselves from lawsuits. For example, most businesses buy general liability insurance, which insures against common business risks such as customer injuries, damage to a customer’s property, and advertising injuries.

Other liability policies include professional liability insurance, also known as errors and omissions insurance (E&O) or medical malpractice insurance, as well as commercial auto insurance and employer's liability insurance.

Business property insurance and commercial property insurance refer to the same type of coverage.

Commercial property insurance includes coverage for your building and the contents of your building, also called business personal property.

Business personal property refers to any items you need to run your business, such as computers, office supplies, furniture, and equipment.

The 80% rule in commercial property insurance is a coinsurance clause that requires you to insure your property for at least 80% of its value. This helps make sure you'll be adequately compensated for a claim.

If you choose to insure your property for less than this amount, you'll receive a smaller portion for a claim.

Not every policy has a coinsurance clause, but they're used by some insurers to make sure their clients are sufficiently protected.