Commercial Property Insurance – What you need to know

Commercial Property Insurance helps protect your business assets such as computers, furniture and inventory. The insurance pays for repairs and/or replacement of your assets so that your business can continue to operate at full speed. Without this coverage, most startups and small businesses would be challenged to replace any expensive equipment critical to the operations.

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Commercial Property Insurance is a subset of insurance usually found under Commercial General Liability Insurance coverage. This insurance type helps businesses replace lost, damaged or stolen equipment.

Typical property covered includes:

• Equipment
• Inventory and supplies
• Office furniture and fixtures
• Computers and electronics
• Tools and equipment in transit or used off-site for business purposes

The following items are generally not covered:

• Accounts, bills & currency
• Data and electronic records
• Automobiles

As you consider a policy, pay careful attention to the exclusions to ensure you understand the true coverage you are receiving. A few common things to watch out for include

• Replacement value versus cash value. “Cash value” is a bit cheaper, but only pays the depreciated value of your asset. This is a good option if you can quickly find second-hand replacements of your assets. “Replacement cost” is a bit more expensive, but pays the full cost to replace the asset.
• Coverage for off-premises property. Quite often your property is only covered while it is physically located inside your office. However, you may take your laptop with you to meetings or inventory to a convention. If this is the case, get coverage for it.
• Coverage for portable electronics. If you have laptops or cameras, you will need to specifically request that this be added onto your policy. Portable electronics are more expensive to insure than standard property (e.g., chairs, desks) because they tend to get stolen or lost more often.

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You likely own home, auto or life insurance policies because they all serve different purposes. If you are running a business, you’ll need to consider many different types of coverage—one of them being commercial property insurance.

Here are some examples of the benefits of this coverage:

• An office has computers, laptops, printers and expensive office supplies that are costly to replace.
• A contractor working with large and expensive equipment that is left overnight, commercial property insurance will cover costs associated with damage or theft.
• An architectural firm that owns very expensive rendering software on your computers that is required to draft blueprints for your clients.
• You are a tech start-up that created a prototype that is damaged.

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Regardless of whether you own or rent your office, Commercial Property is likely required. If you’re leasing or renting out a workspace, your landlord will want to make sure you have some basic level of coverage. Furthermore, any business that has expensive assets (e.g., specialized computers, machinery) should consider buying this coverage. A rule of thumb is that losses that jeopardize the existence of the business should be insured. For example, if a flood-damaged all your equipment, could you afford to replace all of it immediately? If not, consider buying Commercial Property Insurance to make sure you have immediate access to help.