As a business owner, commercial property insurance protects assets such as your premises and the contents in it from perils such as fire and theft. Most insurers offer this coverage. However, their terms differ. For this reason, you should always assess the terms of coverage before paying for the cover. This extract details a few things you should know when getting commercial property insurance.
What Does the Insurance Cover?
Commercial property insurance covers any buildings that your business owns and the contents in these buildings. They may include manufacturing and processing machines, computers, furniture, landscape installations, fences, inventory and documents. Notably, the cover does not include vehicles since they should have auto insurance.
If you operate your business from rented premises, the landlord takes responsibility for building insurance. Therefore, your commercial property insurance will only cover the contents inside the building. Before signing your rental or lease agreement, you must ensure your landlord pays for building insurance. If not, you should deduct the cost of insuring the business from the rent. When taking commercial property insurance, hire an appraiser to establish the value of your assets. It will help you determine the amount of insurance that you need.
What Risks Does the Insurance Cover?
Different insurance companies will cover various risks. Broadly, most insurers will cover your business against fire, theft and flooding. However, it would be wise to examine your business risks and add them to the cover. For instance, you may want protection from riots, subsidence and malicious damage.
Calculation of Premiums
Usually, the insurance company will assess your business risks to determine the premiums. For example, you will pay higher premiums the area is susceptible to flooding or wildfires. However, the insurance company will reduce the premiums if you have taken measures to protect your business from the various risks. For example, it could be that the building has fire control measures and security devices to prevent theft.
How much will the insurance compensate you? For your contents, the insurer could either pay the value of new items or consider the wear and tear on the damaged items. In some cases, the insurer will ask you to combine the cover with business interruption coverage. If a risk occurs, the insurance company will cater to the costs of running your business to cushion you against losses.
Remember to review your cover regularly. Typically, the insurer should adjust the premiums if you sell some of your machines, buy new equipment or move to new premises.