commercial property insurance

Coverage Considerations for Building Owners

When looking into commercial property insurance, consider what it might require of you if you experienced a devastating event that caused major damage to your business. However unlikely you may think this could happen to you, the reality is that unfortunately businesses can undergo serious damage due to natural disasters, fire, major storms or accidents. That’s why choosing the right property insurance is vital.

Business property insurance covers your buildings, the contents within, plus any loss of income you might have if you’re suddenly forced out of business, even temporarily, due to a claim. Your policy can help protect your business in case of accidents or tragedies, from minor damage to the building’s collapse.

What you can expect from your policy

Fortunately, most insurers offer enhancements or endorsements that allow you the opportunity to expand upon the primary coverage that you purchase. This can include coverage in the event of an earthquake, as well as coverage for minor issues, such as replacing a fire extinguisher used during a fire at your place of business.

Be aware of the fact that there may be exclusions to basic policies that can affect your ability to reopen after an unscheduled closure, or continue your operations as soon as possible after a loss. Note that certain perils are often excluded from property insurance policies, including normal wear and tear, floods and earthquakes, employee dishonesty, or any exposures involving vehicles subject to motor vehicle registration.

Naturally, you’ll want to make sure that you have the right amount of coverage, and this can at times be difficult. No one wants to be over-insured, which results in paying higher premiums, or to be under-insured, as this can leave your business and employees vulnerable if the insurance doesn’t cover an issue you may be faced with.

Start out by determining the exact value of your building. Choose an insurer that works with quality vendors that will provide standardized valuation tools that can help in determining your building’s value based on either the cost to replace a building with new construction (replacement value), or for the actual value, which amounts to the replacement value minus depreciation. This is referred to as actual cash value (ACV) or depreciated cost value.

Your business property is of great importance to you and requires commercial property insurance that can address many exposures that you may encounter along the way.