Commercial Property Insurance Must-Knows

Commercial insurance might seem complicated and new to you, but it’s not. You’re a small business owner with limited staff and resources. You’re concerned about the risks of your business…

April 20, 2022

Written by Justin Sloan

Commercial insurance might seem complicated and new to you, but it’s not. You’re a small business owner with limited staff and resources. You’re concerned about the risks of your business but also want to stay protected. It’s tough finding ways to organize your schedule and keep track of all the things happening at once.

That’s why it’s important to have the right insurance in place to protect your business and your assets. Commercial property insurance is one of the most important types of insurance for businesses. This blog post will explain what commercial property insurance is, what it covers, its eligibility, and more.

What’s Commercial Insurance? 

Commercial insurance is a type of insurance that provides coverage for businesses. This type of insurance can protect your business from property damage, liability, etc. 

Commercial Insurance Coverage

Commercial insurance can cover a variety of risks for businesses. This includes property damage, liability, product liability, business interruption, etc. The specific coverage will vary depending on the policy purchased, although it typically includes:

Tenant Improvements: Coverage for alterations, additions, or improvements made to the insured location by the tenant. Protection for the building structure, including fixtures and equipment inside.

Building Coverage: This protects your business from property damage or loss liability on a variety of risks such as perils (including fire) and vandalism and weather events like hurricanes and tornados.

Contents Insurance: This protects your personal property, including furniture, tools, and even inventory that you may have stored at home or in transit.

Business Interruption: If your company suffers a covered loss, this insurance will help to cover lost income and continuing expenses.

Professional Liability: Protects your business from claims of negligence or wrongful actions by employees.

Product Liability: Coverage for product defects that may cause injury or property damage.

Automobile Insurance: Provides coverage for company vehicles used for business purposes.

There are various other types of policies available, and it’s important to work with an agent who can assess your specific needs and find the best policy for you. Don’t wait until you experience a loss to figure out what coverage you need.

Types of Commercial Insurance

There are many different types of commercial insurance policies available. The most common are property, liability, and workers’ compensation.

Property Insurance: Covers damage to or loss of the insured property. This can include buildings, equipment, inventory, and other business assets.

Liability Insurance: Protects the business from legal claims resulting from accidents or injuries that occur on company property or as a result of the company’s operations.

Workers’ Compensation Insurance: Provides coverage for medical expenses and lost wages for employees who are injured or become ill due to their job duties. It also covers death benefits in the event of a work-related death.

Commercial Insurance Eligibility

Not all businesses are eligible for commercial insurance. The insurer will typically require that the business meet certain criteria, such as having a certain number of employees or being located in a specific geographic area.

The type of policy you need will also depend on the type of business you operate. For example, if you own a restaurant, you’ll need property and liability insurance to protect your business assets and cover potential legal claims. But if you own a construction company, you’ll need workers’ compensation insurance to cover your employees if they are injured on the job.

Commercial Property Insurance Specifics

Commercial Property Insurance has specific coverages that are important to business owners. The most common coverages are for the building, its contents, and loss of income.

Building Coverage: This will help pay to repair or rebuild the structure of your business if it is damaged.

Contents Coverage: This will help pay to replace the property inside your building if it is damaged. This includes furniture, equipment, inventory, and more.

Loss of Income Coverage: If your business is forced to close due to a covered loss, this insurance can help pay for lost income. This can be helpful if you have to shut down while the damage is repaired temporarily.

Property Commercial Insurance Cost

The cost of Commercial Property Insurance will vary based on a few factors. Some things that are considered include the size of your business, the type of business, where your business is located, and the amount of coverage you choose.

Businesses with high-value property or those located in risky areas may pay more for coverage than those with lower-valued property or those in safer areas.

Considerations

There are several factors to consider when getting commercial property insurance. These things include:

Location

Consider the location of your business. Is it in a high-crime area? Is it in a flood zone? These are things that will be taken into account when pricing your policy.

Construction

The construction of your building will also be taken into account when pricing your policy. A steel frame building will be more expensive to insure than a wooden frame building.

Contents

The contents of your business are also important. If you have high-value property, such as computer equipment or jewelry, you must make sure that your policy covers it.

Occupancy

The number of people working in your building also plays a role in the cost of your policy. A business with more employees will likely pay more for coverage than a business with fewer employees.

Business Type

The type of business you own can also affect the cost of your policy. Insurance companies often charge more for businesses that are seen as high-risk, such as restaurants or bars.

Take some time to think about these things when getting commercial property insurance. It is important to have the right coverage in place to protect your business. Speak with an agent today to learn more about what is available.

What Events Are Covered Under Commercial Property Insurance? 

Most commercial building policies cover many events, including fires, storms, vandalism, and theft. Some policies may also include coverage for damage caused by earthquakes or other natural disasters, which are not typically covered under property insurance. Talk with your insurance services to see if they’re covered.

Protecting Business Assets

A commercial building insurance policy can help protect your business from costly damages. It can also help you replace lost or damaged property quickly and easily. You may add additional security for things like important papers and records, which can help you save money on replication expenses.

What’s Not Covered By Commercial Property Insurance?

It’s important to know what’s covered and what isn’t under your commercial property insurance policy. While most things are covered by commercial property insurance, there are a few exceptions. For example, policies typically do not cover losses caused by floods or earthquakes. 

Also, business interruption insurance is a separate policy that covers lost income and expenses if your business is forced to close down due to a covered event. Other things not covered by commercial property insurance include:

  • Business liability insurance
  • Workers’ compensation insurance
  • Auto insurance


If you’re not sure whether or not your policy covers something, be sure to ask your insurance agent. They will be able to help you understand what is and isn’t covered.

Merging Commercial Property Insurance with Business Owner’s Policy 

You can acquire a commercial property insurance policy on its own. However, it’s important to know that you can also get a business owner’s policy and combine both to get better coverage. The coverages merged to give you:

Business income insurance, often known as business interruption insurance, helps you replace your lost earnings if you can’t open because of covered property damage. Business property insurance coverage to see whether this coverage or a BOP might assist your company.

Business Personal Property

Business Personal Property insurance is coverage for your personal property while it is used in the course of your business. This includes furniture, tools, and inventory. It also includes property that is in transit. If your property is damaged or lost while it is being used for business purposes, this insurance will help cover the cost of repairing or replacing the property.

Things Covered under BPP:

  • Furniture
  • Equipment/Machinery
  • Business and Personal Property
  • Space Upgrades
  • Stock
  • Leased property

What Is The Typical Deductible For A Business Property Policy?

The deductible is the amount of money you are responsible for before the insurance company begins to payout. The majority of commercial property insurance plans have at least one deductible. These minimize the cost of premiums for both the policyholder and the insurance company.

The typical deductible for a business property policy is $500; however, it can vary depending on the carrier and the policy purchased.

The most commonly used are: 

  • The most common deductible in commercial property insurance is a flat deductible, which is a fixed amount charged to each loss and the most prevalent deductible found in business coverage.
  • When a policy’s limit or the property’s worth is greater than the amount of coverage required, you can use percentage deductibles to protect a certain portion of the coverage.
  • The amount of time before coverage begins is the waiting period; this phrase is very popular in company interruption insurance.

Getting The Most Out Of Your Policy

To get the most out of your commercial property insurance policy. That’s where Nesso Insurance comes in. Our team of experts possesses the knowledge and tools to help you make the best decisions for your business. Our staff analyzes all of the necessary data to assess risk, identify gaps in your coverage, and provide accurate quotations.

At Nesso Group, we understand that every business is different, so we offer customizable policies that can be tailored to your specific needs. We work with several high-quality insurance providers, allowing you to pick from and obtain coverage at reasonable costs. Don’t hesitate to reach out now to get started.

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