Property Insurance Coverage Options

Building Coverage

  • What it covers: The physical structure of your business property.
  • Consider if: You own the building or are responsible for it under a lease agreement.

Tenan's Improvement and Betterments

  • What it covers: If you lease a building but you have improved the interior
  • Consider if: You lease a building and you have invested in significant improvements.

Business Personal Property Coverage

  • What it covers: Contents within the building, such as furniture, equipment, and inventory.
  • Consider if: You have significant assets inside the building that would be costly to replace.

Business Interruption Insurance

  • What it covers: Loss of income and operating expenses if your business is temporarily unable to operate due to a covered event.
  • Consider if: A temporary shutdown would significantly impact your revenue.

Extra Expense Coverage

  • What it covers: Additional costs incurred to continue operations after a covered loss (e.g., renting temporary space).
  • Consider if: You need to minimize downtime and continue operations during repairs.

office building

restaurant interior

Equipment Breakdown Insurance

  • What it covers: Repair or replacement of machinery and equipment that breaks down due to mechanical or electrical failure.
  • Consider if: Your business relies heavily on specific equipment.

Inland Marine Insurance

  • What it covers: Property in transit or mobile equipment.
  • Consider if: You frequently transport goods or have mobile equipment.

Crime Insurance

  • What it covers: Losses due to theft, fraud, employee dishonesty, or social engineering.
  • Consider if: You handle significant amounts of cash, valuable inventory, or are susceptible to fraud.

Flood Insurance

  • What it covers: Damage from flooding, which is typically not covered under standard property policies.
  • Consider if: Your business is located in a flood-prone area, or sewers are known to not handle the waterflow.

Earthquake Insurance

  • What it covers: Damage from earthquakes, also not typically covered under standard property policies.
  • Consider if: You are in an earthquake-prone region.

How to Determine Your Commercial Property Coverage Needs

Assess Your Risks

  • Location: Consider geographical risks like floods, earthquakes, or hurricanes.
  • Industry: Some industries have higher risks (e.g., manufacturing vs. retail).

Evaluate Your Assets

  • Building Value: Ensure coverage is sufficient to rebuild your property.
  • Value of Building Contents: Inventory, equipment, and furnishings should be covered for their replacement cost.

Analyze Your Operations

  • Business Continuity: How long can you afford to be out of operation? Business interruption and extra expense coverage can be crucial.
  • Equipment Dependency: If specific equipment is vital, consider equipment breakdown coverage.

Financial Considerations

  • Deductibles: Higher deductibles can lower premiums but increase out-of-pocket costs during a claim.
  • Coverage Limits: Ensure limits are adequate to cover potential losses without being excessive.

Legal and Lease Requirements

  • Lease Agreements: Some leases may require specific types of coverage or minimum limits.
  • Regulations: Certain industries may have mandated insurance requirements.

Steps to Take

  1. Inventory Your Assets: Create a detailed list of your property, including estimated values.
  2. Consult an Insurance Agent: An independent agent can help tailor a policy to your specific needs and provide quotes from multiple carriers.
  3. Review and Update Regularly: As your business grows or changes, periodically review your coverage to ensure it remains adequate.