Your building, equipment, inventory, and furnishings represent years of investment. Commercial property insurance protects the physical assets that keep your business running.
Key Coverages
- Building coverage, including permanently installed fixtures and equipment
- Business personal property — inventory, furniture, computers, tools, and machinery
- Business income and extra expense coverage for lost revenue during a covered shutdown
- Coverage for fire, wind, theft, vandalism, and other covered causes of loss
- Valuable papers and records coverage
- Ordinance or law coverage for code-required upgrades during repair
How It Responds
Example 1: A kitchen fire damages your restaurant’s dining room and destroys equipment in the back of house. Commercial property coverage pays to repair the building, replace the damaged equipment and inventory, and — paired with business income coverage — helps cover payroll and rent while you rebuild.
Example 2: The roof to your building gets damaged during a hurricane and hail damage severely damages the roof and exterior HVAC systems. Your property policy would respond here.
Who Needs This
Any business that owns a building or holds physical inventory, equipment, or furnishings of meaningful value — from a single storefront to a multi-location operation.
Additional Information
Covering commercial real estate is referred to as “lessors risk” coverage – meaning it’s covering the property but not the business inside. This is often the case when you have a landlord that owns the building and rents to a tenant.
Insurance companies will need to know key details of your property (year built, age of the roof, updates to electric, plumbing etc). They will also want to know the operations of the business inside. Higher risk businesses could effect eligibility and rate.
Frequently Asked Questions
How much should I insure my commercial building for?
The building limit should generally reflect the cost to rebuild the property, not its market value or purchase price. Construction costs, building features, code requirements, and current replacement-cost estimates should all be reviewed.
Does commercial property insurance cover lost rental income?
It can when appropriate business income or rental value coverage is included and the loss results from a covered cause of loss. Property owners should review both the amount of income protected and the applicable period of coverage.
Does commercial property insurance cover flood damage?
Standard commercial property policies generally exclude flood. A separate commercial flood policy is typically needed for rising or accumulating surface water.
What is ordinance or law coverage?
Ordinance or law coverage can help pay additional costs created by building-code requirements after a covered loss. This can be particularly important for older commercial buildings.
How should I insure multiple commercial properties?
Owners with multiple properties should review the portfolio as a whole, including replacement values, tenant operations, deductibles, liability limits, catastrophe exposure, and ownership entities.