Commercial Property Insurance.

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Commercial Property Insurance

Protecting your business property.

Commercial property insurance provides coverage for your building and your business personal property which may include tools and equipment, machinery, furniture and fixtures, supplies and inventory, improvements you’ve made as a tenant, stock in the building and within 100’ of the insured premises, and property of others while on your premises. Protection is provided against physical loss or damage by fire, theft, accident, or other means. Typically, loss due to flood is NOT covered unless flood insurance has been purchased.

Explanation of Property Insurance Coverage
Property coverage for small business insurance can cover your costs to repair or replace what you've lost and, in some cases, compensate you for items that are physically irreplaceable. Because every business is vulnerable to property damage or loss at any time, this insurance coverage is one of the first to consider when starting up a business.

Replacement Cost vs. Actual Cash Value?
Property coverage can be structured several ways, and the premiums you pay are based on how comprehensive your business insurance coverage is. If you don't own your building, you'll simply need contents coverage. In the most basic policies, property insurance for business contents covers furniture, fixtures, inventory, office equipment and other supplies stored at your facility. You may insure those items for replacement cost (which means you'll receive a settlement based on how much it will cost to replace the items at today's market prices) or for actual cash value, which pays only for the depreciated value of the property. While replacement cost insurance policies have higher premiums, they may help your business recover from a loss faster, since you can replace all of the lost or damaged property with new items. For this reason, most insurance professionals will recommend buying property coverage insurance for small businesses on a replacement value basis. Also, if you lease some of the equipment at your facility, your leaseholder may require that you insure the property at replacement value. However, if your business owns its own equipment and could easily purchase any equipment it might lose at the depreciated market value, the lower premium of an actual cash value policy might be a better choice.

What About Movable Property & Equipment?
Insurance which concerns itself with movable property or equipment involved in transportation is called “inland marine” coverage. An inland marine policy is set up for miscellaneous tools that travel to various jobsites with the insured, contractor’s equipment, and machinery such as forklifts and cranes. These items do not fall under the property insurance coverage policy.

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Resources

Insurance Information Institute