What’s Commercial Property Insurance?

April 29, 2022

If your business is in a physical location and you have employees then commercial property insurance is a must-have for you. These properties are vulnerable to all sorts of risks and damages, resulting from fires, storms, thieves, and so on.

Regardless of the size of your business, surely there are several costly items inside which require some level of protection. Therefore, commercial property insurance can provide you with the level of protection that suits your business’s needs.

Commercial Property Insurance

What It Covers

Commercial property insurance offers protection to your building, supplies, inventory, tools, equipment, furniture, and other valuables.

Also, any outdoor fixtures you have will be covered, such as signs, outdoor furniture, and fences.

When you purchase an insurance policy, you have to know what all is covered and what’s not. Therefore, you’ll need to choose between an open peril and named peril policy. These policies are very distinct from one another so you need to be aware of their key differences.

• The open perils policy is a much broader protection plan and will cover everything besides the stated exclusions. Typically, events like a flood or hurricane would be considered a common exclusion. This policy will be more expensive since it does offer better protection.
• The named perils policy will only cover items that are specifically listed in the policy. This would typically include wind damage, theft, fire, and vandalism.

What Affects the Cost

The value of your property and physical assets will ultimately determine the cost of your commercial property insurance. For example, if you sell high-end furniture you’ll likely pay more than someone selling custom t-shirts. This is because the more expensive the product, the more protection you’ll need.

Also, if you run your business out of your home you’ll pay far less for insurance. This is because office buildings tend to be worth more so they require greater protection.

Therefore, let’s take a look at the factors that can affect the cost of a commercial insurance policy:

1. The construction quality of your property can influence the cost of your insurance. For example, is everything up to code and current safety standards?
2. The industry you’re in will also be a determining factor in the cost of your insurance. For instance, is your business an e-commerce site? If that’s the case you won’t have any customers coming into your building so there’s less risk involved.
3. The location of your commercial property has a significant impact on the cost of your commercial policy. Is your office near the coast and more prone to wind and flood damage? You’ll also want to take into account local crime in your area.
4. How well is your commercial property protected? Installing a security system to deter thieves can lower the cost of your insurance. Also, installing a fire alarm and sprinkler system will indicate to your insurer that you’re making an effort.

According to a survey, the average cost of commercial property insurance is around $63 per month while the yearly cost can amount to $756.

 

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Source

https://www.forbes.com/advisor/business-insurance/commercial-property-insurance/