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 a new 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 liability insurance protects your business’s physical assets and valuable business resources.

What does commercial property insurance cover?

Also called commercial building insurance, this kind of coverage can help safeguard your building and everything inside. Companies that offer commercial property insurance often break it 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. You need this if you own real estate. Property insurance for commercial buildings should include protection from weather events such as wind, as well as accidents and vandalism 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 (whether owned, borrowed or rented). This type of insurance for commercial property protects items such as your laptop, desk, chairs, and more. If they are damaged, your insurance will pay the cost of their repair, replacement or actual cash value.

Commercial property insurance provides coverage for damage to the following:

  • The building’s exterior – For example, 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 will be protected in case of damage or loss by business contents insurance.
  • 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 additional 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 building insurance.

This type of business insurance works even when you’re not working. Business building insurance protects your (proverbial) house, while business contents insurance 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

Commercial real estate insurance comes in the form of general liability insurance and commercial property insurance. With a Business Owners Policy (BOP), you get both. A BOP is a package of general liability insurance 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:

  • 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.
  • Commercial property insurance – Provides business building insurance, business contents insurance or both to protect your business’ assets inside and nearby your property.

What factors impact the cost of commercial property insurance?

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

  • Building materials
  • Adjacent exposures
  • Proximity to a fire station
  • The building’s sprinkler system (or lack of)

Furthermore, commercial property insurance carriers will factor in the coverage limit you select into your premium cost. 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 lower coverage limit that works for you when requesting a quote. Get an insurance quote for commercial property coverage with one simple click and just a few minutes.

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 of the common exclusions for commercial property insurance are:

  • Deliberate property damage caused by the insured
  • Business interruptions unrelated to covered property damage (staffing shortages, shutdowns due to pandemic, etc)
  • Acts of God (flood, tornado, earthquake)
  • War
  • Wear and tear
  • Property that is lost, damaged, or vandalized off-site
  • Some other kinds of business property:
    • Vehicles
    • Building foundations
    • Cash and bonds
    • Crops
    • Animals (other than livestock)
    • Data
    • The cost of excavation

Always make sure you read your policy and understand the specifics of your coverage to identify what’s excluded. If needed, talk to your commercial property insurance agent (or company) to clarify questions. In addition, take the necessary steps to mitigate your risk profile. To do so, keep your property in good repair, and 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). Bundling these policies together saves small business owners time and resources.

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 Protection

If you own, lease 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

Workers’ compensation

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
 
 

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 you caused incurred by a third party, whether on your property or as the result of your (or your employee’s) actions. Property insurance covers loss or damage to your owned, physical 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. To view your policy, log in to your Thimble account on the app or website.

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