As a small business owner, purchasing insurance is important to properly protect your business. While there are many different plans you should consider, commercial property insurance is one of the most important. If you're shopping around for a commercial property insurance policy, check out these six facts to consider and help you pick the right plan and add-ons for your business.
All-Risk Policies Cover Most Common Risks
When choosing a policy, there are two different options: all-risk and peril-specific. All-risk policies are designed to cover standard risks that any business faces, but they don't cover everything. They come with a list of exclusions, and everything not mentioned in the exclusions is covered. Common exclusions include war, earthquakes, flood, pollution and wear and tear. When an accident does occur, you don't have to prove it is covered. Instead, it is up to the insurance company to prove if it was or was not covered.
Peril-Specific Policies Only Cover a Handful of Risks
A peril-specific policy is designed to cover you from accidents and disasters that are common for the area. They only cover what is mentioned in the policy. Common examples of covered perils include hail, windstorm, fire, riot and vandalism. These plans are less expensive than all-risk plans, but when it's time to file a claim, it's your job to prove the damages were caused by a covered peril.
Commercial Property Insurance Covers the Physical Location
If you own the building in which you run your business, commercial property insurance is definitely a must because it protects the physical building. If the building is damaged in a covered disaster/accident, you get reimbursed to repair the building. However, it isn't just the building that commercial property insurance protects. It usually covers any outdoor signs, fences and even landscaping.
It Also Covers the Property Inside the Building
Commercial property insurance is also there to protect the property inside the building. This usually includes inventory, furniture and equipment. Basically, anything your business owns and needs to run is usually covered. Even employee's belongings are often covered. For example, if an employee flees the building during a covered disaster but leaves behind their personal laptop, commercial property insurance usually covers the cost to replace the laptop.
Commercial Property Insurance Doesn't Cover Data
There are some things, however, that commercial property insurance doesn't cover, such as data. Obviously, an insurance policy can't return lost data from a disaster, hacker or virus. That information can only be regained if you have a protected backup. However, the time it took to gather and enter that data or information cost money, and commercial property insurance won't reimburse you for that money. Unless you have a backup, you'll have to gather the information again with money from the business.
It Doesn't Cover Business Interruption
Perhaps the most important thing commercial property insurance doesn't cover is business interruption. A disaster doesn't just destroy your property, it can halt your business entirely. While you're rebuilding and purchasing new equipment, your business may not be able to make any money or pay the employees, and these losses are not covered by standard commercial property insurance. To protect yourself fully, you should bundle your commercial property insurance into a business owner's policy (BOP).A BOP can be crafted to fit your personal business, and it usually includes coverage for property, business interruption, vehicle, liability and crime.
Purchasingbusiness insurance is the best way to protect your business from a disaster. Whether you choose an all-risk or peril-specific policy, make sure to fully understand what is covered, and consider a BOP to ensure your business stays afloat during a disaster. For more information, contact an insurance broker or agent in your area today.