Commercial Property and Building Insurance

March 13, 2023

There are a few key things to know about commercial property and building insurance. First, coverage varies from policy to policy. Second, commercial property coverage is classified by the type of event leading to a loss and by what things are insured.

Building insurance covers the physical structure of the building, including the walls, floors, ceilings, and fixtures. This type of insurance typically covers damage caused by events like fire, wind, hail, and lightning. Property insurance, on the other hand, covers the contents of the building, like furniture, equipment, and inventory. This type of insurance typically covers damage caused by events like theft, vandalism, and water damage.

When it comes to commercial property insurance, it's important to understand what you're covered for and what you're not. Make sure to read your policy and review it with your broker carefully so that you know what's covered in the event of a loss.

The key items insured in commercial property insurance includes the following:

- The building itself

- The contents of the building, like furniture and equipment

- Business Interruption insurance, which covers lost income if the business has to close due to a covered event

- Extra Expense insurance, which covers the cost of temporary relocation and other expenses incurred during the repairs.

Some additional property you will want to insure may include:

  • All office equipment (owned or leased)
  • Important company documents
  • Manufacturing or processing equipment
  • Inventory
  • Fence and landscaping
  • Signs and satellite dishes

Is commercial property insurance mandatory?

There is no federal law that requires commercial property insurance, but most lenders will require you to have it if you're borrowing money to purchase a property. Many landlords will also require their tenants to carry commercial property insurance. Even if it's not required, it's still a good idea to have coverage in case of an unexpected loss.

How much does commercial property insurance cost?

The cost of commercial property insurance depends on a number of factors, including the value of the property, the type of business, the location of the property, and the amount of coverage you need. Generally speaking, the more valuable the property and the higher the risk, the more expensive the insurance will be. You can get an estimate of how much your insurance will cost by contacting a broker.

When shopping for commercial property insurance, be sure to work with your broker to compare quotes from different insurers to get the best rate. It's also a good idea to review your policy regularly and make sure that it still meets your needs.

No matter what type of business you have, commercial property insurance is an important part of protecting your investment. Make sure you understand your coverage and review your policy regularly to ensure that you're still getting the best protection for your needs.

Are there different types of commercial property insurance?

Commercial property insurance plans pay for losses based on the replacement cost of each item or its actual cash value.

  • Replacement cost: Replacement cost (RC) is the amount necessary to repair or rebuild the property on the same premises, with comparable materials and quality, without deducting any amount for depreciation.
  • Actual cash value: Actual cash value (ACV) is the cost to replace it with new property of quality, minus depreciation.

Generally, premiums for policies covering property insured on an ACV basis are lower because the limits include the depreciated value. This amount might not be enough if you elect to insure the property on a RC basis.

What are the benefits of commercial property insurance?

There are many benefits to having commercial property insurance, including:

- Protection from loss: In the event of a covered loss, commercial property insurance can help you cover the cost of repairs or replacement.

- Peace of mind: Knowing that your property is protected can help you sleep better at night and focus on running your business.

- Financial security: If something happens to your property, commercial property insurance can help you stay afloat financially while you make repairs or replacement.

What are some things to consider when choosing commercial property insurance?

When choosing commercial property insurance, there are a few things to consider, including:

- The value of your property: Make sure to insure your property for its replacement value so that you can fully recover from a loss.

- The type of business you have: Make sure to choose a policy that covers the specific risks associated with your type of business.

- The location of your property: Your premiums will be lower if your property is located in an area with low risk of natural disasters or other hazards.

Why work with Summit Commercial Solutions for your commercial property insurance needs?

At Summit Commercial Solutions, we understand the unique needs of businesses and we can help you find the right policy to protect your property. We work with a variety of insurers so that we can find the best coverage for your needs at the most competitive rate. Contact us today to get started.

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