Commercial property insurance serves to protect a business’ physical property and its contents from various damage causes such as fire, wind, hail, lightning, smoke, theft, vandalism and more.
What many business owners may not realize is that commercial property insurance isn’t generally required by any state or federal law. This doesn’t mean you don’t need commercial property insurance, however.
When Do you Need Commercial Property Insurance?
If your business has a physical location, you will need commercial property insurance. This is especially true if you are renting or leasing a location, as the landlord or loaner may require you to carry commercial property insurance to both protect your business and themselves in case of an accident. Ideally, you should have commercial property insurance from the very beginning when you plan on starting a business.
Even if you don’t have a physical location, you may need commercial property insurance, as it also covers equipment and products. If you run a business out of your home, your home insurance may not cover equipment or products related to your business, meaning you will need commercial property insurance in case your business items are destroyed or damaged.
You will typically be required to carry commercial property insurance as long as you have a physical location, although your specific coverage needs may change depending on various factors.
How Much Commercial Property Insurance Do You Need?
The amount of commercial property you need depends on the size of the business, industry and value of your business’ property. A business with multiple physical locations, for example, may need more in commercial property insurance than a business with only a single location.
Industries with large amounts of property, including heavy or expensive equipment, may also need higher rates of commercial property insurance. Your needs will also depend on where you are working. IF your business is in an area with frequent rainfall, floods or storms, you may need more commercial property insurance as well as specific endorsements.
This will also affect the cost of commercial property insurance, as higher limits result in higher premiums.
Business owners should speak with an insurance agent and compare quotes when shopping for commercial property insurance to protect their business and its physical assets. You can often save on business insurance by bundling your commercial property insurance with general liability insurance into a business owners policy (BOP), which is a flexible policy designed to combine coverages affordably for small businesses.