Flame engulfed the building and firefighters rushed to the scene. You never imagined your business would burn to the ground, but it happened.
Fortunately, you were smart enough to have business property insurance. While the physical building can’t be fixed, your business will bounce back because you had the right policies in place.
how much does commercial property insurance cost?
The amount you pay for business property insurance depends on your business. each business is different with variables that must be considered.
It is important to note that commercial property insurance coverage may also be offered under a business owner’s policy. By combining general liability coverage and business property insurance, business owners benefit from simplicity and cost savings.
A small business owner may pay as little as $500 per year, while a large corporation might pay $500,000.
The average company pays between $1,000 and $3,000 per million dollars of coverage. most pay less than $1,000 a year, with an average of $742.
For example, a medium-sized landscape business with 20-30 employees may pay $3,000 to $5,000 per year due to increased equipment and space risks. storage.
There are many variables to consider when pricing a commercial property insurance policy, including:
- construction: how the structure of the business was built and its status. Features like fire-retardant materials and upgraded hvac systems can lower rates.
- Occupancy: Who occupies the business during office hours influences rates. Businesses with high traffic or numerous employees pay more because higher occupancy means higher risks.
- Risk: The insurer will determine an overall risk to the business and building before issuing a rate. all variables are analyzed before offering any policy.
- exposure: insurers analyze the location of the company. this determines if the surrounding area is problematic. if it’s located in a high crime neighborhood, then the rates are higher.
- Protection: Things like alarms and sprinkler systems can lower commercial property insurance rates. Proximity to a fire station or fire hydrant is also beneficial.
- Basic Form Policy: covers standard natural disasters, fire, smoke, vandalism and theft. for most businesses, this coverage should be enough.
- Broad Form Policy: Covers everything the basic form coverage does, plus protection against falling objects, the weight of snow or ice, water damage, and structures that they collapse.
- special form policy: covers everything that is not specifically excluded.
war: most policies exclude damage to a building caused by war. this includes terrorist attacks and damage from missiles or other war machines.
- certain fires: Fire coverage insures a building for damage caused by a fire that does not normally occur within the building. however, if the fire started in a natural fire location, such as a stove, your claim could be denied if the fire escapes and damages your building.
- Earthquakes: This type of risk is excluded from all commercial property insurance policies. some providers may offer an endorsement to add this coverage. otherwise, you must call an earthquake authority insurer to obtain this coverage.
- Certain Smoke: Smoke damage on a standard policy is covered, but is excluded if the smoke was due to an accidental occurrence. this includes when the smoke damage is from a factory or various agricultural exposures.
- act of god (weather): some insurance companies allow wind and hail coverage in a standard policy. damage from accumulations of ice, snow, dust and sand are not normally covered. if those items are damaged outside the building and then damage inside the building, they may be insured. flooding is never included in a standard commercial property insurance policy.
what is commercial property insurance?
Business property insurance is coverage designed to protect any business property. offers protection against natural disasters, theft, fire, equipment breakdown, repair costs and lost income.
Imagine that a New York businesswoman opens a second-hand clothing store. A week later, she arrives at the building to find that the windows are broken and that she has no inventory.
The thieves stole more than $100,000 worth of merchandise. For an entrepreneur just starting out, that’s a lot of money. Without commercial property insurance, this woman may have difficulty reopening her business due to loss of capital.
who needs business property insurance?
Any business that has physical assets that are essential to the flow of income needs business property coverage. Although these policies can represent a significant expense, they should not be considered optional. do not leave your company vulnerable.
what does commercial property insurance cover?
Commercial property insurance covers everything related to the building used for business purposes. the building, equipment, certain landscaping items, fences and more are covered by this policy.
There are three different types of coverage:
What does commercial property insurance not cover?
Commercial property insurance is comprehensive but not all-inclusive. the standard policy will not cover commercial vehicles, personal property, employee wages, and the following:
When it comes to insuring commercial buildings, coinsurance refers to the percentage of the value that the owner must insure.
for example, if you have a building worth $500,000, a policy with an 80% coinsurance clause requires you to have at least $400,000 in coverage.
This value can only be determined at the time of loss, which complicates the situation. If your insured amount is below the coinsurance percentage, you may pay a penalty.
Business property insurance is essential for any business with physical assets. don’t risk losing your business when tragedy strikes.