What Do I Need to Know About Commercial Property Insurance?
If you are a business owner, it is important that you take the necessary steps to ensure that your commercial property is protected in the event of an unforeseen accident. Whether you are running a business out of a building that you rent or own, or out of your home, you likely invested a significant amount of money on equipment, furniture, tools, and other resources necessary to run your business.
Just as you protect your home by purchasing homeowner’s insurance, it is essential that you protect your business assets by obtaining commercial property insurance. According to an analysis of small business claims, approximately 40 percent of small business owners submit an insurance claim within ten years of operation. The business could suffer devastating losses if the business owner did not have a commercial property insurance policy in place. If you own a business and have questions about commercial property insurance policies, do not hesitate to contact a skilled insurance lawyer at your earliest convenience.
What Is Commercial Property Insurance?
Commercial property insurance is used to protect any commercial property from unexpected perils like fire, theft or natural disasters. Oftentimes, people assume that commercial property insurance only covers the building where you conduct your business. However, that is not the case. This type of policy covers a wide range of assets from furniture to landscaping to loss of income. There is no one-size-fits-all when it comes to commercial property insurance, as every business has unique needs. Therefore, you can tailor your policy to reflect your specific needs. Depending on the size of your business, you may want to purchase a standalone policy, or Business Owner’s Policy (BOP) which combines the following essential coverages into one:
- Commercial property insurance
- General liability insurance, which covers claims that your business caused injuries or property damage to another person
- Business income insurance, or business interruption insurance, which helps replace lost income in the event that you are unable to conduct business due to covered property damage
What Does Commercial Property Insurance Cover?
Commercial property insurance protects your business’ assets from a range of unforeseen events, including fire, storms, theft, and vandalism. You have the option of purchasing additional coverage for events like floods, earthquakes, equipment breakdowns, and other natural disasters that result in significant losses to your business. In addition, if you are unable to open your business due to property damage that is covered by the policy, commercial property insurance can help replace lost income. The following are examples of things that are covered by commercial property insurance:
- Buildings occupied and listed on the property
- Employees’ personal property
- Exterior signage
- Fencing and landscaping
- Important documents
- Machinery, including boilers and HVAC systems
What Is Not Covered by Commercial Property Insurance?
There are certain types of property damage that are not covered by a commercial property insurance policy, including the following:
- Any damage to your property that was intentionally caused by you or one of your employees.
- Damage causes by one of your employees punching a hole in your client’s wall.
- Damage to a customer’s laptop if he or she tripped in the office.
- Damage to your building and inventory that is caused by a flood after a heavy rainfall caused a nearby river to overflow.
- Damage to your vehicle if you were involved in an accident while making a delivery to a customer.
While the above scenarios are not covered by your commercial property insurance policy, you can purchase additional types of commercial insurance that will provide more comprehensive coverage that will help cover the costs associated with these claims.
What Are Examples of Common Commercial Insurance Claims?
As a business owner, if you are aware of some of the common issues that cause other business owners to file commercial insurance claims, you may be better prepared if you find yourself in the position of having to deal with one of these issues yourself. The following are examples of the most common business insurance claims:
- Burglary and theft: Unfortunately, you cannot always prevent a petty criminal, an angry customer, or a disgruntled employee from stealing from your business. This is the most common type of business insurance claim, with approximately 20 percent of claims related to burglary and theft.
- Fire: Most small business owners are not aware of some of the common causes of fires, and the amount of time and money required to clean up and get the business back up and running again after a fire. Even after the fire has been put out, the fire department must complete a thorough investigation, and the insurance company will need to investigate your property claim. Each of these investigations take time. A fire can cause considerable damage in a short period of time. If you do not have commercial property insurance, the costs associated with repairing the damage can be financially devastating.
- Weather damage: Extreme weather can wreak havoc on a business if it causes property damage or prevents you from being able to continue running your business. Heavy rain, snow, hail, and wind can damage property, and freezing temperatures can cause pipes to burst. If a major weather disaster occurs, like a severe snowstorm or a hurricane, it can shut down a business for days or even weeks. According to recent data, over 25 percent of businesses that close due to a natural disaster never reopen, many of which did not have the necessary insurance to cover the loss.
- Customer injury: If a customer slipped and fell while he or she was on your business property, you may be liable for any injuries he or she suffered. If customers visit your place of business on a regular basis, you may want to consider adding general liability insurance to your policy. This will allow you to submit an accident claim if a customer or an employee suffers an injury while on your property.
- Struck by an object: While not as common as burglary or weather damage, people can get struck by an object while on your property. If a customer or employee is injured after being struck by an object, you may be able to file a claim with your commercial property insurance provider.
How Do I File a Commercial Insurance Claim?
If your business is impacted by any of the issues discussed, and you wish to file a claim, the process is fairly straightforward. The first step is to contact your insurance provider as soon as possible and explain the situation. Provide a detailed description of the damage to your property, as well as any injuries that were involved. If complaints were made by customers, share the details of the complaint to the insurance provider. If you are filing a liability claim, your insurer will conduct an investigation in order to confirm what happened. Your insurance agent will review your policy to determine what is covered and what damages you are liable for. If there are significant repairs that need to be made to the property, your insurance agent may provide the names of contractors that you can contact to make the necessary repairs. You should also consider hiring a public adjuster who will ensure that your best interests are his or her top priority when verifying damages. Your insurer will likely assign an adjuster to the claim, but this individual is being paid by the insurance company, and will be looking for ways to save them money. Upon completion of the investigation, the claims adjuster will notify you and let you know when you can expect to be reimbursed.
What If My Claim is Denied?
While the claims process is usually pretty straightforward, there are situations where the insurance company may deny the claim. There are a number of reasons why this may happen. For example, if you did not file your claim within the required amount of time, or if the insurance policy does not cover the claim, it may be denied. In addition, if the insurance company suspects that your claim is fraudulent, it will be rejected. However, if you believe that your claim has been wrongfully denied, you can write a letter to the insurance provider explaining why you think they were wrong to deny the claim. Make sure that you provide copies of records and any other documents that can help your case. You may also want to consider hiring an experienced insurance lawyer to contest the denial of a claim, or any other aspect of the claims process.
Warren Insurance Lawyers at Herold Law, P.C. Assist Clients with Commercial Property Insurance Issues
If you are a business owner and you want to speak with someone about commercial property insurance, contact our Warren insurance lawyers at Herold Law. P.C. Protecting your rights is our top priority. To schedule a confidential consultation, call us today at 908-647-1022 or contact us online. Located in Warren, New Jersey, we serve clients throughout the surrounding areas, including Plainfield.