Whether you are a small business owner renting your store, or you own your own commercial property and have dozens of employees, having commercial property insurance is essential. Suffering damages through unpredictable events such as fires, theft, accidents, or weather events can adversely affect your business. Having the right commercial property insurance helps protect you, your family, and your livelihood.
Also known as “business property insurance,” commercial property insurance covers the physical assets of a business, offering protection for items such as the business’ building, office equipment, inventory, business records, supplies or valuable papers, depending on how you customize your insurance coverage. It can protect anything your business owns, even outdoor fixtures like signage or fences. Similar to homeowner’s insurance, natural disasters like earthquakes or floods are not covered unless they are specifically added to the policy.
Different Types of Commercial Insurance
When you own a business, you face many different risks that you need protection from. Fortunately, there are different types of commercial insurance that could benefit you and your business:
- Commercial property insurance: Not only does commercial property insurance cover the physical assets of your business, but they can also cover increases in business expenses or loss of income that resulted from covered property damage.
- Professional liability: Professional liability protects against errors that may occur while performing a professional service. Essentially, it covers any damage that occurs as a result of failing to do one’s job.
- General liability: This coverage protects a business or company should their operations or products cause bodily injury, personal injury, or property damage. It also covers any injuries that might occur on the business’ premises.
- Commercial auto: Commercial auto insurance covers any vehicles used during business-related activity. It also covers bodily injury or property damage caused should a covered vehicle be in an accident.
- Commercial umbrella: These types of insurance policies offer increased liability limits for a business.
- Employment practices liability: This type of coverage protects a business from misconduct, inappropriate employment practices, or if an employee claims their rights have been violated. Claims such as wrongful termination, discrimination, or sexual harassment are covered under employment practices liability insurance, as well as others like invasion of privacy or defamation.
- Workers’ Compensation insurance: Workers’ comp is insurance that covers medical expenses and lost wages should an employee get injured at work. It also covers rehabilitation and treatment costs, as well as death benefits for the worker’s family. It should be noted that the majority of states require most businesses to carry workers’ compensation insurance.
- Business interruption insurance: Also known as business income insurance, this type of insurance covers any profits a business lost while the business was closed due to a disaster.
- Cyber liability: This type of insurance is coverage for both liability and property losses that may occur if the company is involved in electronic and online activities.
How Much Does Commercial Property Insurance Cost?
When you have commercial property insurance, you want to check if your policy is a “named perils” policy or an “open perils” policy. A “named perils” policy is least expensive, and will cover damages only from those listed in the policy, like vandalism or weather damage. An “open perils” policy is more expensive but offers broader coverage, covering problems unless they are listed as an exclusion.
Regardless of if you are insuring a home office in someone else’s building or you own the building and the property of your business yourself, a commercial property insurance policy can help protect you. However, the costs would be different; the cost of such a policy largely depends on the value of the property and its assets. A few factors that are considered when pricing a commercial property policy include:
- Location: When pricing your policy, an insurance agent will look at your business’ location and ask if it is prone to certain weather events or what type of neighborhood your business is in. For instance, if theft is a high risk in your area than then rates are most likely higher.
- Building: Considered here is the condition of the building and what materials were used in construction of the building. Your premium is likely affected by the age of the plumbing and electrical systems, as well as if there are any flame retardant materials used.
- Industry: Industry plays a large factor in how much your insurance premiums would be. Insurance companies look at the type of business you are conducting, and the risks involved, as well as how many employees you have and how many customers you generally see. For instance, an insurance office would have lower risk than a factory equipped with heavy machinery.
- Protection: An agent will look at what kind of protections the building has against incidents like theft or fire when quoting a policy. The location of the nearest fire hydrant or fire station or if a sprinkler system is installed will factor in the cost, as well as other building protections like security systems.
Furthermore, there are two types of commercial property insurance to be aware of when filing a claim:
- Replacement cost coverage: This coverage pays to replace your lost property using materials of the same or comparable value and does not factor in the property’s depreciation.
- Actual cash value coverage: This coverage pays the present-day value of the property that was lost or damaged and does factor the property’s depreciation. This means that you would most likely have to pay the difference for the lost value of the property that was replaced. This will, however, reduce your insurance bill.
How to File a Commercial Property Insurance Claim?
According to research done by the Hartford, four out of ten businesses will use their commercial property insurance and file a claim. In order to file a claim with your business insurance, you generally will have to follow these steps:
- Gather evidence: When your property is damaged, you must take numerous photos of the evidence and get the information and names of whomever was involved, such as employees or witnesses. You may have to contact the police and file a report if there was a theft or an auto accident.
- Contact your insurance: Here is when you contact your insurance agent and file the claim for your loss. You will have to provide them your information, your policy information, the type of incident and information concerning the incident. More than likely your agent will inform you of what information they will need.
- Assess the damage: Next, an adjuster will be assigned to your claim, and they will assess the damages or losses. You will provide the adjuster with as much information as you can, and they will see what is and what is not covered under your policy.
- Estimates for repairs: It is recommended to get at least two different estimates for your repairs, and the insurance company may request to get estimates of their own. The insurance company also has to give the okay before you can move forward.
- Get repairs completed: After you get the okay, you may get the repairs completed by whoever’s estimate was approved.
- Settle the claim: Some places that do insurance repairs may bill the insurance company directly, or you may have to pay them first and the insurance company will reimburse you.
The Warren Insurance Lawyers at Herold Law, P.A. Can Help You and Your Business with Commercial Property Insurance
Filing a commercial property insurance claim can become complicated quickly. Our knowledgeable Warren insurance lawyers at Herold Law, P.A. are here to help. We have years of experience and can help you through the insurance claim process. Call us today at 908-647-1022 or fill out our online form for an initial consultation. With our offices located in Warren, New Jersey, we proudly serve all clients of the surrounding areas.