What Is Commercial Property Insurance? (2024)

FAQs

What Is Commercial Property Insurance? ›

Commercial property insurance protects commercial property from such perils as fire, theft, and natural disaster. A variety of businesses, including manufacturers, retailers, service-oriented businesses, and not-for-profit organizations carry commercial property insurance.

In short: Commercial property insurance can help cover the things your business owns. Liability insurance can help cover expenses if you are at fault for an injury with the people you interact with (excluding employees) or damage to property you don't own.

Commercial property insurance definition

Commercial property insurance protects your company's physical assets from fire, explosions, burst pipes, storms, theft and vandalism. Earthquakes and floods typically aren't covered by commercial property insurance, unless those perils are added to the policy.

Commercial Property Insurance

Property insurance covers the building structure itself, as well as business property such as equipment, inventory, furniture, and more. Covered perils in a property insurance policy usually include losses from fire, storms, theft, burglary, or vandalism.

Like home insurance, commercial property insurance does not cover damages or losses caused by flooding or earthquake. However, you can stay protected against these risks by purchasing an additional endorsem*nt on either earthquake or flood insurance or both depending on your requirements.

Property insurance refers to a series of policies that offer property protection, including structural damage, theft of personal belongings, and liability coverage. Property insurance can include homeowners insurance, renters insurance, flood insurance, and earthquake insurance.

The continued impact of catastrophic events is a major factor driving up costs, along with the increasing cost of capital, financial market volatility and inflation. This is an expense carriers need to pass along to customers.

Most commercial property policies include a flat (or straight) deductible. A flat deductible is a specified dollar amount that applies to each loss. It is subtracted from the amount of a covered loss, and the amount remaining is paid by the insurer.

Commercial insurance refers to insurance coverage intended for businesses instead of individuals. Commercial insurance is also called business insurance. Business insurance covers losses related to unexpected events like lawsuits, accidents, or natural disasters, among others.

Commercial property includes office buildings, medical centers, hotels, malls, retail stores, multifamily housing buildings, farm land, warehouses, and garages. In many U.S. states, residential property containing more than a certain number of units qualifies as commercial property for borrowing and tax purposes.

Why do businesses need property insurance? ›

Business property insurance covers your buildings, the contents within those buildings, and loss of income if you're out of business due to a claim. It can help protect your business in case of unexpected accidents or tragedies like fire, theft, wind damage, or even a building's collapse under the weight of snow.

If a building insured under a commercial property policy was vacant for 60 days, certain perils that are commonly excluded from coverage due to vacancy may include vandalism, sprinkler leakage (unless you have protected the system against freezing), building glass breakage, water damage, theft, and any attempted theft.

This insurance essentially provides the same kind of protection as property insurance for consumers. However, businesses can usually deduct the cost of commercial property insurance premiums as expenses. Commercial property insurance generally does not cover losses arising from tenants using the building.

These refer to the obligations and rights of the insurance company and the insured. Common conditions apply to every type of coverage on a CPP. This includes Examination of Books and Records, Transfer of Rights and Duties, Cancellation, Policy Changes, and Premiums.

Homeowners insurance doesn't cover floods, earthquakes, typical wear and tear, and damage due to insufficient maintenance. You can usually add flood and earthquake coverage to your policy for an additional fee, but wear and tear and damage from a lack of maintenance are considered preventable.

Commercial general liability insurance, or CGL insurance, helps protect your business from claims that it caused bodily injuries or damage to another person's property. This coverage is also known as general liability insurance or business liability insurance.

General liability covers injuries and damages that occur in the course of doing business. Casualty insurance focuses on injuries on your business premises and crimes against it. Property insurance covers losses to your land, buildings, and belongings, and it is sometimes combined with casualty insurance.

Also known as business liability insurance, general liability insurance protects you and your business from “general” claims involving bodily injuries and property damage. Almost every business has a need for general liability insurance.

You can think of it this way: General liability insurance only covers certain liability losses. BOP covers those same liability and some losses to property that your business owns.