Business Property Insurance
Business Property Insurance, also known as Commercial Property Insurance, protects your business against unforeseen damages to your building, property, and contents.
Determining Your Business Property Insurance Needs
Most companies are required to carry some form of liability insurance as a cost of doing business. Commercial liability coverages protect you and your business against claims made by people who feel they have been damaged or wronged by your company. Liability coverage, however, does not protect the property owned by you, the business owner. To protect your business property, you also need to choose Business Property Insurance.
If your company has any loans or mortgages for owned property, the lending bank will probably require you to carry Business Property Insurance. This will protect the bank’s interest in the property. A bank will offer a loan in exchange for holding something as security for the loan. The bank will place a lien on the item or property you seek a loan for until the loan is paid. While the bank holds a lien, it has a vested interest in the property.
The amount of coverage you need may depend on the type of properties and assets your company owns, where your company does business, and your business’s claim or property history.
Understanding Your Coverage Options
In broad terms, Business Property Insurance covers your commercial building property and its contents.
Business Property Insurance may cover accident events such as:
- Weather-related damage
- Fire damage
Insurance will not cover an intentional act, or damage that occurred outside the insurance policy term.
Some Business Property Insurance policies may extend coverage to other structures that are owned by your company and related to the insured property. Motorized vehicles or boats are not covered as business property and must be insured separately.
Some things that may be covered under a Business Property Insurance policy include:
- Building structures
- Electronic equipment such as computers
This list is not exhaustive nor a guarantee of coverage. Business Property Insurance may also extend coverage to property that does not belong to you or your business, but is in your possession when it sustains damage.
Business Property Insurance may be purchased as a stand-alone policy, but it is often part of a comprehensive Business Owner’s Policy (BOP). This coverage will combine the Business Property Insurance with General Liability coverage in one package. However, they are two distinct coverages.
You can choose Business Property Insurance policies to suit your business needs. For instance, Business Property Insurance may be offered as either replacement cost or actual cash value. Actual cash value provides a coverage option to repair or rebuild damaged property based on the property’s value at the time it was damaged. This means the cost to repair your property may be affected by depreciation. Actual cash value policies are often less expensive than replacement value policies. A replacement cash value policy will pay the damage claim based on the cost of the current market rate of the materials needed to repair or rebuild the damaged property.
Why Business Property Insurance Is Necessary
A business’s structure is among its most important assets. The physical structure is needed to house employees and all needed equipment. The business itself cannot run without its tools.
The continued operation of your business in the face of an unforeseen disaster or accident is the purpose of Business Property Insurance. An accidental fire can bring a company to a screeching halt. The potential damage to records, equipment, and the structure wherein people conduct business could be devastating. Business Property Insurance provides the coverage you need to protect your commercial property from such an unforeseen disaster.
Even if you do not own the property on which your business operates, you can still benefit from a Business Insurance Policy. Lease agreements sometimes require the lessee to provide coverage for the business renting the space. If this is the case, the property owner’s policy may not extend coverage to the building’s furnishings, supplies, and materials. Failure to carry your own Business Property Insurance may leave you with no coverage for damaged business property.
To Learn More
To learn more about Business Property Insurance and how the professionals at Jump Insurance can help you find the right policies for your business’s needs, please visit Jump Insurance for more information.
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