Commercial property insurance is essential for businesses and is designed to protect their physical assets and property from financial losses due to covered perils. It may compensate business owners financially when their commercial properties, such as buildings, machinery, equipment, inventory and other physical assets, are damaged or destroyed. 

What Is Commercial Property Insurance and Why Do Businesses Need It? 

 

Commercial property insurance is designed to help safeguard a company’s tangible assets from various risks and perils. Commercial property insurance is a vital component of a comprehensive risk management strategy for businesses because it helps protect physical assets and ensures that a business can recover from property-related losses, thereby minimizing financial disruptions.  

How Is the Cost of Commercial Property Insurance Calculated? 

 

Some of the critical factors that influence the cost of commercial property insurance include the following: 

• Property value
• Geographic location 
• Construction type
• Property use
• Security measures
• Claims history
• Coverage limits and deductibles 

What Does a Typical Commercial Property Insurance Policy Cover? 

 

Commercial property insurance typically includes three primary elements: 

• Property insurance helps safeguard the building, interior and exterior fixtures, permanently installed equipment, machinery, and other structures on the property. It may help facilitate repairs or reconstruction in the aftermath of incidents such as fires or storms.
• Business personal property insurance may assist in restoring or replacing business-owned assets like furniture, fixtures, inventory and improvements within leased premises.
• Personal property of others coverage extends protection to items owned by third parties but under your business’s care and custody, including customers’ possessions and borrowed items. 

Beyond these fundamental coverages, commercial property insurance can encompass recommended add-ons such as business income and extra expense insurance, equipment breakdown insurance, and ordinance and law coverage. These supplementary options enhance businesses’ defenses and resilience in the face of unforeseen occurrences. 

Contact John L Sprague Agency to discuss commercial property insurance coverage. We can help recommend a comprehensive business insurance policy based on your organization’s needs.