Commercial Property Insurance

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What is commercial property insurance?

Commercial property insurance covers a business’s first-party property from accidental damage, vandalism, or loss. It is essential for any businesses with a physical location (such as a store, office, or studio).

You might be asking yourself if you really need another type of coverage when you have general liability insurance. The answer is, yes. While general liability insurance covers damage to property of third parties (your clients’ and other people’s property), commercial property insurance protects your business’s items and property.

What does commercial property insurance cover?

Also called commercial building insurance, this kind of coverage can help safeguard your building and everything inside. It can be broken down into two types of coverages:

Business building insurance

Covers damage or destruction to the physical location. It protects the building’s structure (the walls around your stuff) from a variety of accidents, such as a fire or a rock thrown through a window. Types of commercial property structures include: 

Buildings

Office spaces

Retail spaces

Hotels

Farms

Business contents insurance

Covers what’s inside the property or usually within 100 feet of the premises, including personal and business assets. This property coverage protects items such as your laptop, desk, chairs, and more.

Commercial property insurance provides coverage for damage to the following:

The building’s exterior

Say you’ve bought a building to run your business out of. Should something damage your building, you have to pay for the repairs—unless you have commercial property insurance.

What’s inside your building

Whether you rent or own your place of business, you have valuable business equipment inside. From your computer to specialized equipment and tools, your property needs to be protected in case of damage or loss.

Outdoor property

Fences, satellite antennas, or even trees and shrubs you own could be costly to replace without insurance.

Equipment used to maintain the premises

You may have a lawnmower, pressure washer, or another piece of equipment that you use to maintain your workspace. This is a business asset, too. (For maximum equipment coverage, be sure to purchase the equipment breakdown add-on.)

Business interruption due to a direct physical loss

Should physical damage to your building or equipment prevent you from conducting business, business interruption insurance could help cover the costs associated with the loss of income.

Who needs commercial property insurance?

Does your small business rent, lease, or own a physical location? Does that property contain valuable assets, such as equipment and inventory? Then you probably need commercial property insurance.

This type of business insurance works even when you’re not working. It covers your vital equipment 24/7, so you can sleep soundly knowing that the assets you need to succeed are protected.

Commercial property with general liability: BOP insurance

A Business Owners Policy (BOP) is a package of general liability and commercial property insurance. It helps small- to medium-sized businesses protect their company from the daily risks the company may face.

With BOP insurance you’ll be covered with:

  • Commercial property insurance – Provides business building insurance, business contents insurance or both to protect your business’ assets inside and nearby your property. 
  • General liability insurance – This type of coverage provides the investigation, defense, and settlement for third-party claims stemming from bodily injury, property damage, and personal and advertising injury.
  • Business interruption insurance – This covers loss of business income sustained due to interruption of operations as a result of direct physical loss or damage.

What factors impact the cost of commercial property insurance?

The cost of the policy will depend on your liability limit and the location of your property. Certain factors impact an address’ safety rating (and cost), such as: 

  • Building materials
  • Fire resistance grade
  • Proximity to a fire station
  • The building’s sprinkler system

Another factor impacting insurance cost is the coverage limit you select. Through Thimble, businesses can get up to $1 million worth of building damage covered, and up to $500,000 worth of content damage covered. Not all businesses may need as much, and you have the option to select a coverage limit that works for you when requesting a quote.

What commercial property insurance doesn’t cover

As with all types of insurance, commercial property insurance has exclusions, or particular kinds of risks that aren’t covered. Some common exclusions for commercial property insurance are (but are not limited to):

  • Deliberate property damage caused by the insured
  • Business interruptions unrelated to covered property damage (staffing shortages, shutdowns due to pandemic, etc)
  • Acts of God that aren’t explicitly named (flood, tornado, earthquake)
  • War
  • Wear and tear
  • Property that is lost, damaged, or vandalized off-site
  • Some other kinds of property:
    • Vehicles
    • Building foundations
    • Cash and bonds
    • Crops
    • Animals (other than livestock)
    • Data
    • The cost of excavation

Always make sure you understand the specifics of your coverage to identify what’s excluded. In addition, take the necessary steps to mitigate your risk profile. To do so, keep your equipment up to date. In addition, take out specific insurance for your vehicles (auto insurance), and for your data (cyber insurance).

What other kinds of business insurance do I need?

General liability insurance

The most basic type of small business insurance, general liability insurance, covers third-party claims of bodily injury, property damage, and personal and advertising injury. It provides the investigation, legal defense, and settlements for claims brought against you and your business, even if you are ultimately not found to be responsible.

Should you want both general liability and commercial property insurance, you can package them together into a Business Owners Policy (BOP).

Workers' compensation insurance

This type of insurance can help protect your business from financial losses should an employee incur an injury or illness while on the job. It’s often mandated by the state and can help cover the costs of medical expenses, lost wages, permanent disability, rehabilitation, and death benefits.

Learn more

Professional liability insurance

Also known as errors & omissions (E&O) provides the investigation, defense, and settlement in the case of a client claiming that your advice or professional actions or failure to provide them caused your client to suffer financial loss.

Learn more

Business Equipment Insurance

If you own or borrow tools and equipment to execute your work, Business Equipment Protection (aka inland marine insurance) can protect you from financial loss resulting from accidental damage, vandalism, loss, or theft of your tools. While commercial property insurance may only cover owned equipment within 100 feet of the insured property, inland marine insurance covers your gear anywhere in the US, even if it’s a rental.

Learn more
 
 

Commercial property insurance FAQs

Does commercial property insurance protect my gear and equipment?

If that gear is in or within 100 feet of the insured property, then yes. If that equipment is off-site, no. For equipment you take to job sites, you’ll need business equipment protection (BEP) or other inland marine coverage.

What’s the difference between property and liability insurance?

Liability coverage protects a business from financial consequences arising out of damages incurred by a third party, whether on your property or as the result of your (or your employee’s) actions business operations. Property insurance covers loss or damage to your own, first-party, business assets—both the building and its contents.

How are commercial property insurance claims handled for Thimble policies?

To report a claim for either general liability or commercial property, please email Coterie Claims Team Support at claims@coterieinsurance.com. Or call 1-855-680-2440 (available 24/7).

For more specific details, please follow the contact instructions listed on your policy.

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