How Does Commercial Property Coverage Work?
Let’s talk about compensation. Perhaps the most elusive commercial property insurance coverage question is: how do you get reimbursed? It seems tricky to nail down, but luckily it comes down to your preference. You can either opt to receive cash for the value of what was destroyed or receive reimbursement based on the cost for replacement. This means that if the cost of what was stolen or destroyed is less than the cost to replace it, you’ll have to come up with the extra money you need to get what you need. Of course, that means the policy based on case value will generally cost less. So, if you have equipment that is particularly prone to depreciation, despite the higher cost policy, replacement value is most likely the best option for you.
What Does Commercial Property Insurance Cover?
Commercial property insurance is all about protecting your place of work and the physical things you use to run your business. It is there to cover you against loss and damage of your business’s property as a result of things like fire, smoke, and windstorm damage. It also can protect against damage due to vandalism and theft. Your building, equipment, supplies, inventory, and even your furniture, signs, and fixtures can be covered by commercial property insurance. If you have property related to your business held at a location like a storage unit or even somewhere like your very own garage, a commercial property insurance policy can often cover those assets in case they are stolen or destroyed.
What Doesn’t It Cover?
Every commercial property insurance policy is different. Most do not cover natural disasters such as earthquakes or floods. They also don’t cover regular wear, goods or equipment in transit, or vehicles used for your business. It also won’t cover damage to property that belongs to your customers, theft by employees, or the cost to recover destroyed payment records. There are also plenty of other kinds of risks that it won’t cover. That is why it is crucial to assess the risks for your business and know what the policies you are considering offer. If you need more coverage, no problem. You can always bundle your insurance package or add more coverage to your policy—more on this below. To get the most out of their policies, many business owners choose to combine their coverage through a business owner’s policy (BOP). Read more about bundling and BOP’s here.