There are many risks to keep in mind when thinking of the building your company is in. Which makes getting commercial property insurance so important. Commercial property insurance or business property insurance protects the building the company is in, the contents within the building, and loss of income. It a vital business insurance policy that covers your company from unexpected events such as fire, theft, vandalism, wind and other covered perils.
Business property insurance can be bought as a stand alone policy or purchased in a business insurance package. Policies such as business owner policies will combine business property insurance and general liability insurance. This is a very popular option amongst new small businesses.
Business insurance coverage; Commercial property insurance
There are some things that will be excluded from commercial property insurance coverage. Above we named a few of the covered perils, below are the perils that more than likely will not be covered;
- Floods and earthquakes
- Employee dishonesty
- Normal wear and tear
- Exposures involving vehicles subject to motor vehicle registration
Business Insurance Enhancements and Endorsements
The majority of business insurance companies offer enhancements and endorsements that will give you the opportunity to expand upon your primary coverages. Some of the endorsements and enhancements offer are as follows;
- Coverage in case of an earthquake
- Coverage of smaller costs, such as replacing a fire extinguisher after a fire
Commercial Insurance; Protecting your companies income
There’s a good chance if your business is effected by a natural disaster, your business could see a significant loss. This can take a toll on you, your employees, as well as repair and rebuilding efforts. Business income insurance, also known as business interruption insurance, is typically structured either on a limited time period or limited amount of income.
Choosing the right amount of business insurance coverage
Replacement value vs. actual value
Knowing how much coverage you need for your business isn’t always incredibly clear. You never want to get more business insurance than you need and you wouldn’t want to be underinsured either. You may want to start with the value of the building and materials used throughout, from there it may be a good idea to take an inventory of the contents. Some business insurance companies work with vendors who may provide valuation tools, determining a homes value based one of the following factors;
- Replacement value: The cost to replace a building with new construction
- Actual value: The replacement value minus depreciation—also referred to as actual cash value (ACV) or depreciated cost value
What you decide on should be based on the estimate it would cost to rebuild the structure if a disaster strikes. If your coverage is based on actual cash value, more than likely the business insurance premiums you pay will be lower. There’s also a chance you pay more out of pocket if you have to file a claim.
Coverage that’s based off replacement value comes with higher business insurance premiums. Although, the out of pocket expenses you may encounter will more than likely be lower.
Commercial property insurance; Owning vs. renting your building
Is the building something you own or do you rent it? Owning means you’re responsible for most of the expenses if you experience a loss. Now if you’re renting, you may have different demands and options. You’ll want to work with your insurance agent to determine whats best for your business.
Business Insurance Quote
If you’re interested in a free business insurance quote, please give us a call today at 916 313 6100. One of our wonderful agents will answer your call and walk you through all of the steps.