What Is Commercial Property Insurance?

Commercial property insurance, sometimes referred to as “business property insurance”, protects your businesses physical assets and real properties from damage, loss, and theft. Business property that’s typically covered under this type of insurance includes:

• Buildings, stores, and offices
• Furniture and equipment
• Computers
• Tools
• Inventory
• Important business documents
• Exterior signs, fences, and landscaping

In essence, all types of business property can be covered under this type of insurance policy.

How Commercial Property Insurance Works

The intent of commercial property insurance is to pay for the repair, restoration or replacement of your damaged, lost, or stolen property. Property Insurance can also help your business resume normal operations as quickly as possible.

You can purchase commercial property insurance on its own, it’s often available as part of a business owner’s policy or a Commercial Package Policy (CPP). A BOP or CPP bundles general liability insurance and property insurance (and sometimes business interruption insurance) into a single, more affordable policy. A standard commercial insurance policy also comes with several add-ons for specific types of property coverage.

Who Needs Commercial Property Insurance?

Most business owners should at least consider commercial property insurance. If any of the following applies to your business, you’ll definitely want to invest in this type of insurance:

• own or lease office space
• lease or rent equipment
• manufacture a product
• maintain inventory
• own physical business assets

Online business owners might think that commercial property insurance is unnecessary because they don’t own significant amounts of physical property. However, commercial property insurance policies can cover electronic data that might be hacked into or lost. Plus, computers and other electronic equipment are covered as well.

What Does Commercial Property Insurance Cover?

Commercial property insurance protects your business’s property against a number of risks.

Most commercial property insurance policies cover the following losses:

• Theft of business property
• Accidental damage to business property from external incidents, such as fire
• Natural disasters, particularly fire and storm
• Disrupted computer operations and data hacks

Are You Buying Enough Commercial Property Insurance?

One of the most important aspects of purchasing property insurance is making sure that you have purchased enough coverage to be adequately protected. A typical policy will provide the replacement cost value for your building and the actual cash value for your business property. Replacement cost value is the amount that is necessary to replace or rebuild your building or repair damages with similar materials, without considering depreciation. Actual cash value, on the other hand, is the value of your property when it is damaged or destroyed. This amount is typically determined by subtracting the depreciation from the replacement cost value.

Most property insurance policies include a coinsurance clause, which requires you, the policyholder, to share the cost of covered services up to a moderate percentage of the actual cash value of the property. This will allow you to receive full coverage for your losses. Should you decide to purchase inadequate coverage for your property, you may be obligated to pay a percentage of all losses, even if they are listed in the policy.

If you've read this far, thank you for your interest in Carriage Trade Insurance Agency, Inc. We work with multiple A+ rated companies in New York, New Jersey, Connecticut, and Pennsylvania. Please feel free to call our office at 516.358.5600 or contact us online and we'll get back to you promptly.