If you own any type of commercial property or retail space, then you need commercial property insurance. Commercial property insurance is critical for small businesses as it protects against common losses, such as theft, damage, employee injury, and liability. If a business does not have the proper protection and suffers significant property damage, the business may never recover from the financial consequences of the loss. As every business is different, not all require the same coverage options or the same amount of coverage. It is important to consider the unique risks that your business faces and find ways to reduce these risks. If you are considering commercial property insurance for your business, here are a few things that you should know.
What Does Commercial Property Insurance Cover?
You never expect your business to succumb to serious damages. However, these types of incidents happen every day. When your business does suffer thousands of dollars or more in damages or thefts, you want to ensure that you are prepared to handle the financial impact. Commercial property insurance typically covers the building itself, as well as items both inside and just outside.
Inside your building, a commercial property insurance policy would likely cover any furniture, equipment, computers and inventory. Depending on your unique policy, you may find that your commercial property insurance also covers important documents. Outside of your building, your policy may cover fencing, landscaping, and exterior signs. Another important thing that most commercial property insurance policies cover is other people’s property. For example, if you have equipment that you rented it would usually be covered.
Common Risks And Costs Of Property Damage
Commercial property damage is designed to cover a number of risks. This includes unexpected events like fires, explosions, storms, and burst pipes that can cause extensive damage to your business property. However, it may not cover other weather-related acts, such as floods and earthquakes, unless those specific perils are added to your policy.
The cost of a commercial property insurance policy can greatly range based on several factors. First, consider your location. If you live in an area that is prone to damaging storms or other types of natural disasters, your policy may cost more. Also, consider the construction of your building. Does it have upgraded plumbing and electrical? Is the building constructed using fireproof materials? If not, you can expect to pay more for your insurance.
Factors Considered In Insuring Commercial Property
When deciding whether to insure a commercial property, an insurance company will consider several important factors. First, the insurer will look at your repair and maintenance standards. How you keep up with your building’s maintenance makes a big difference as buildings that are not maintained often experience more frequent problems. In addition to how well you maintain your building, your insurer will consider your building’s proximity to certain risks. For example, if you live near an area that is prone to wildfires or earthquake zones, your business may be considered high risk.
The size and age of the property may also be considered by your insurer. The bigger the property, the more threats that your business faces. In addition, if your building is older and lacks certain structural upgrades found in more modern properties, then your business may experience higher policy costs.
Best Ways To Reduce Risks
Property insurance can cost small businesses an average of $1,000 to $3,000 a year per million dollars of coverage. The good news is there are ways to keep your commercial property policy affordable. First, consider raising your deductible. Just like any other type of insurance policy, having a lower deductible means that you will be responsible for paying more for small insurance premiums but less when you actually need your insurance.
Next, consider cutting any unnecessary coverage. For example, if you are paying extra for flood insurance but you do not live in an area that experiences floods, then you probably do not need this coverage. There are also ways to reduce the risks that your business faces that could lower your policy amount. This includes implementing disaster preparedness, theft-prevention programs, and similar means of prevention that can help lower your level of risk. You can also help reduce risks by providing human resources professionals with additional training and improving workplace safety measures.
Make Informed Choices With Benefits And Insurance Experts
If your business is lacking the coverage it needs to keep your building and its contents safe, then consider commercial property insurance. Whether you run a small restaurant, sell vehicles as an auto dealer, or sell any other type of product or service, you should be insured if you own commercial space. Ready to learn more about commercial property insurance and how it can help protect your business from the unexpected? Then contact the benefits and insurance experts at BenefitCorp.