If you are a business owner, your goal is not only to grow your business, but to protect it in the event of physical damage. Many businesses, especially smaller businesses, would not have the capital on hand to pay for repairs or a complete rebuild if their store, restaurant, or facility experienced a major catastrophe like a fire or even a relatively minor event like vandalism. That’s where commercial property insurance steps in to help.
Who needs commercial property insurance?
If you operate your business from a physical location, commercial property insurance is needed. If you own the property yourself, commercial property insurance is most likely required by your mortgage company. If you lease your commercial property, it is important to review the terms of your lease. In many cases, the landlord will be responsible for providing commercial property insurance for the building, but the tenant must still purchase coverage for their property in the building; it is always best to be sure.
What does commercial property insurance cover?
While the details vary from policy to policy, generally speaking, commercial property insurance covers your physical building and the contents inside of it, like computers, furniture, and even your store’s inventory. The coverage can be used to repair or replace the property or contents in the event that it is damaged by a covered peril, or if a theft has occurred.
It is important to have a conversation with your agent at Smryl about what perils are considered covered in your policy. Many policies will not automatically cover damage due to floods and earthquakes, for example, so if your business is located in an area that is prone to these types of natural disasters, you may be advised or even required by your mortgage company to purchase additional coverage specifically for those perils.
How much does commercial property insurance cost?
How much your commercial property insurance costs will vary from business to business and building to building. There are many factors that affect and determine the cost of commercial property insurance. One of the greatest determining factors is the value of the property and the contents inside of it. For example, insuring a multi-level gym full of specialized and high end exercise equipment will cost more than insuring a small office used by a business that simply has a few computers, desks, and chairs.
Another factor to consider is the degree of risk your property faces due to its physical location. If your business is located in an area that is considered high risk—whether from the crime rate or from the probability of natural disasters—your insurance premiums will most likely be higher.
The condition of your building also plays a role. Insuring a newer building with state of the art sprinkler systems and alarm systems will be less expensive than insuring an older building where outdated materials may make for a greater fire hazard, or where the alarm system is not yet updated with the most modern and effective technology.
It’s also important to keep in mind that the amount of coverage that you want to have will affect the overall cost—the higher the level of coverage, the more you will have to pay for the policy.
If you are a business owner, talk to a business insurance expert at Smyrl Insurance today about the type and level of coverage you need to cover your commercial property!