It takes a lot to make your business run smoothly.
Here’s how commercial property insurance can help.
Whatever type of business you own, there are countless things that pose a hazard to your bottom line. These risks range from employee injuries to global pandemics, yet for most business owners, it’s things like fire, water damage, and windstorms that keep them up at night.
Thankfully, there’s commercial property insurance.
Commercial property coverage is something that every business needs, even those without a product line or even an office. Let’s take a closer look at this essential (but often misunderstood) form of coverage to help you make better decisions about your insurance.
What Is Commercial Property Insurance?
Much like your personal home insurance policy covers the structure of your home and your personal belongings, business property insurance provides coverage for the things (i.e. property) that your business owns.
What Is Commercial Property?
For insurance purposes, commercial property refers to tangible items that you use in the operation or marketing of your business.
This includes such things as:
- Commercial Buildings;
- Furniture and Office Equipment (i.e. desks, appliances, electronics, etc.);
- Products and Inventory;
- Records and Documents (limited coverage);
- Outdoor Features (such as fences, landscaping, signage).
What Does It Cover?
Commercial property insurance covers accidental and sudden damage to property caused by external factors. Your policy will stipulate exactly which causes are covered (or excluded).
Your commercial property insurance will typically cover losses like:
- Fire
- Smoke
- Wind
- Hail
- Lightning
- Tornadoes
- Theft
- Vandalism
When you purchase or renew your policy, you should also ask whether it’s an actual cash value or replacement cost policy. This will determine whether the insurance company will consider the depreciation of the cost to replace the lost or damaged item.
What’s Not Covered
As with any type of coverage, knowing what your policy doesn’t cover is just as important as knowing what it does.
Floods and earthquakes are two common exclusions to commercial property insurance. While Florida doesn’t see too much of the latter, flood insurance can be purchased through a separate policy.
Commercial insurance will not cover wear and tear on your equipment. (Just like pest damage, this is considered preventable.)
If your business owns a company car, delivery van, food truck, or any other type of vehicle, you will need a separate commercial auto insurance policy. (If you own multiple vehicles, look into commercial fleet insurance!)
Finally, something that no insurance policy will cover is intentional acts. Again, insurance coverage is designed for sudden, accidental loss. Intentionally damaging your property just to collect on your insurance policy amounts to fraud.
What Does Commercial Property Insurance Cost?
As with any type of insurance, your small business insurance premiums will depend on a variety of different factors.
The value of your business personal property is only a small part of the equation. The insurance company also needs to look at your level of risk. Therefore, your location (and local weather patterns), the occupancy of the building, security measures, and more must all be considered.
The good news is that you may be able to deduct your premiums on your taxes!
Other Essential Policies
Covering property damage isn’t the only thing that insurance can do. Thankfully, there are a plethora of commercial policies that help protect against a wide range of risks!
- BOP – A BOP, or Business Owner’s Policy, combines commercial property insurance, general liability insurance, and business interruption insurance.
- Workers’ Compensation – Workers’ comp insurance covers medical bills and a portion of lost wages for employees who are injured on the job. In Florida, workers comp is required for any business with more than four (4) employees.
- Umbrella Policy – Umbrella insurance extends your coverage limit on any existing liability policies.
- Cyber Risk Insurance – Cyber risk insurance covers things like data breach and cyber attacks that can take down a small business.
- Equipment Breakdown Coverage – Equipment breakdown insurance (also known as “boiler and machinery insurance”) covers your equipment from internal causes, such as your copy machine going on the fritz or your elevator breaking down.
- Errors & Omissions Insurance – E&O insurance helps cover legal fees in the event you are sued due to an (unintentional) error.
- Valuable Papers and Records Insurance – While commercial property insurance protects tangible property, paperwork and files can be a bit of a gray area. Valuable papers and records insurance can help fill in the gaps.
- Electronic Data Processing (EDP) Insurance – Paperless office? EDP insurance can be added as a rider to your commercial property policy and covers the cost to replace and/or repair your data processing system.
Keep in mind that every business’s needs are different. For example, if you own a specialized business, such as a food business, you may need additional policies. Talk to your independent insurance agent for more guidance.
Take Your Business Seriously
Commercial property insurance isn’t “just another business expense.” In fact, it can mean the difference between closing up shop and serving Central Florida for another 50 years.
At Harry Levine Insurance, we want your business to thrive as much as you do. That’s why we put our efforts into making sure you have great coverage!
Our friendly agents are here to discuss your needs, risk tolerance, and budget so we can help connect you with the policies that work best for you. Call today for a free commercial insurance quote.
