Commercial Property Insurance
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Frequently asked questions about commercial property insurance

Commercial property insurance covers the repair or replacement of stolen, lost, or damaged business property. It covers your business location and assets, such as equipment and inventory. Find out how to get a policy, when it's required, and the answers to other frequently asked questions below.

Commercial property insurance requirements and coverage

Is commercial property insurance required by law?

Any legal requirements for commercial property insurance will come from your landlord, such as commercial property insurance or small business renter’s insurance, given this coverage is typically required for leases. Your landlord may ask to see your proof of insurance before signing a lease.

What does commercial property insurance cover?

Commercial property insurance, also referred to as business hazard insurance or business renter's insurance, covers your business personal property and tangible assets such as office supplies, furniture, inventories, computers, machinery, and equipment. It insures such business assets against loss from risks like fire, vandalism, and theft.

Does commercial property insurance cover natural disasters and weather events?

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

If you live in a hurricane-prone area, a standard commercial property policy likely excludes 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 higher deductibles than the rest of your commercial property insurance.

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

What kind of property insurance do I need for a home business?

If you run your business out of your own home, your homeowner’s insurance probably wouldn’t cover your business assets or liabilities.

For this you would need Business Personal Property (BPP) insurance, 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.

Does commercial property insurance cover vehicles?

Commercial property insurance does not cover any vehicles used by your business. For this you would need commercial auto insurance for any vehicles that your business owns, or hired and non-owned auto insurance (HNOA) for rented, leased, or personal vehicles used for work.

Do independent contractors need commercial property insurance?

If the loss of any of your business equipment would put you in a financial bind, then you may 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 (BOP) instead.

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

Does property insurance cover property in transit?

No, property insurance only covers your business 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 or contractor’s tool and equipment coverage.

Inland marine insurance covers products, tools, and equipment while being transported over land or stored off-site.

Contractor's tools and equipment insurance, also known as equipment floater insurance, helps contractors and those in the construction industry cover the cost of replacing tools and equipment that are lost, stolen, or damaged while in transit or at a job site.

This includes portable tools, and large equipment such as backhoes and bulldozers. It typically applies to items that are less than five years old and does not cover normal wear and tear.

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 can also cover common risks such as fire, theft, vandalism, and water damage.

Does property insurance cover business interruptions?

Business interruption insurance, also known as business income insurance, isn’t automatically included in a standard commercial property insurance policy, but it can be added to your commercial property insurance or business owner’s policy.

If your business is interrupted because of a covered claim, having business interruption coverage can help you with the cost of day-to-day expenses, lost revenue, and relocation from a business interruption.

You could also add extra expense coverage and contingent business interruption insurance. Having an extra expense endorsement added to your property insurance can cover expenses that go beyond your normal operating costs, such as employee overtime, hiring temporary workers, or leasing equipment to keep your business running.

Contingent business interruption insurance offers financial help when the loss of a primary supplier or customer impacts your business. It can help your business survive while you search for new suppliers or customers.

Does property insurance cover damaged financial records?

Your financial records can be covered through accounts receivable insurance, which is an additional endorsement that can be added to your commercial property insurance.

Also known as 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).

How to buy commercial property insurance with Insureon

How quickly can I get commercial property insurance with Insureon? 

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 a certificate of insurance, 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.

How is my commercial property insurance rate calculated?

There are several factors used in determining your cost of commercial property insurance, such as your location, the age and size of your business property, fire and security protection, the cost of your equipment, the coinsurance clause of your policy, and whether you insure your property for its replacement value or its actual cash value.

Replacement value covers the cost of a brand-new item and is more expensive than actual cash value, which covers an item’s depreciated value.

Which industries most often purchase commercial property insurance?

Any business that owns or rents a business location (outside of their own residence) 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 damages to a construction project due to weather, fire, vandalism, or theft.

Commercial property insurance policy changes

What happens if I need to buy more insurance later?

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

What happens if I cancel my policy?

If you cancel a policy before its expiration date, you could wind up paying more for your 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.

Compare commercial property insurance with other policies

What's the difference between liability insurance and property insurance?

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

Business liability insurance refers to different types of liability insurance that small business owners use to financially protect themselves from a variety of risks, such as 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 injury.

Other liability policies include professional liability, also known as errors and omissions insurance or malpractice insurance, as well as workers’ compensation and cyber liability.

Updated: January 3, 2023
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