Every business, no matter how big or small, should be protecting their assets with commercial property insurance. Commercial property insurance provides security with coverage for items such as manufacturing equipment, inventory, furnishings, and your office equipment and supplies.
In order to protect the assets at your commercial premises, finding the right insurance policy is a priority. Your commercial property insurance can provide coverage beyond your physical assets. With the right policy you can also be covered for:
- Buildings, contents, stock, signs, and glass
- Equipment breakdown
- Accounts receivable
- Loss of income
- Employee dishonesty
- Money, securities, valuable records, computer data
- Boilers and machinery
- Comprehensive general liability
- Cyber liability
Here is how you can find affordable commercial property insurance you can depend on for worry-free coverage.
Understand Your Current Policies
First, it is important to review any current policies you have to understand what coverage they offer. You can speak to your insurance broker to review the details as they can make recommendations for what you will need to cover for your commercial property.
If you rent your property, your landlord’s insurance will not protect your assets located on the premises. This type of insurance only covers damage to the building itself. Even if your business is located at home, your home or renters’ insurance will only cover your personal items.
Although there are riders offered to homeowners who run a business from home, they won’t necessarily cover everything related to your business. You need a commercial property insurance policy to cover your business assets. You can also discuss bundling options with your home, auto or life insurance policies to get the best possible prices.
If you don’t own the commercial property and just rent it, purchasing a building contents or equipment insurance policy might be the better option for you. You can investigate more affordable insurance options that will cover losses related to your business contents, including fixtures, furniture, office equipment, supplies, and inventory.
Know What’s Covered
If you own your commercial property but rent it out, commercial property insurance will provide coverage to protect you against losses if your building is damaged, broken into or vandalized. You can discuss the policies available and make sure you are covered for the most common issues related to property claims such as:
- Theft and vandalism
- Power surges or outages
Your policy will state what will be covered, and you can discuss this with your insurance broker to make sure you know what will be covered in case an incident occurs including:
- Replacing damaged equipment
- Replacing furnishings and fixtures
- Replacing your product inventory
You don’t want to be left having to cover expenses for things you thought were covered but were not.
Replacement Value vs Cash Value Coverage
Insurance policies offer you the option to insure your property at its replacement value or its actual cash value. This can be tricky to decide because the option you go with will affect the premiums you pay. Here are the basics for each option:
Your insurance company will provide you with the value of the items you lost so you can replace them. This means you will purchase brand new replacements. Because you will require more money to replace items, your replacement value policy will have higher premiums.
This policy is best suited to your business when:
- You have hard-to-replace, specialty or expensive equipment/items on the premises
- You have a lot of high-tech gear that will depreciate more quickly
- You have the inventory you are selling on the premises that will have to be replaced brand new
Keep in mind you are being paid based on “like-kind or quality” prices that will come with limits. You won’t be able to upgrade fixtures or equipment in your office but instead will have to make replacements with the same or most similar item.
Actual Cash Value Benefits
Actual cash value coverage provides compensation based on the depreciated value of damaged items. This means that the insurance company considers how old the item is, its condition, and how much the value will have dropped since you purchased it, which makes premiums lower.
If your business does not store inventory or contain expensive, hard to replace items such as antique furniture, this might be the better choice for you.
Understand the Value of Your Assets
The value of your assets often goes beyond the material value. For example, if your computers are damaged, or someone steals a manager’s keyfob, the information is also lost.
Although most businesses today are smart enough to have off-site storage for their important work, sometimes new work might only be saved on a computer. Despite this, some workers just don’t follow protocol, which can lead to trouble.
It can cost your business tens of thousands of dollars or more when computers are lost or damaged. Therefore, you need to make sure everything you own is properly valued to get the right coverage.
Discuss value in detail with your insurance provider to make sure you have the right coverage for your assets that are both tangible and intangible. This would include things such as computer data and the option for cyber liability coverage in case of a security breach.
Reduce Risks to Reduce Premiums
If you want to reduce your premiums, you should have a risk management strategy in place. If you can prove you have reduced risk, many insurance companies will offer discounts. A state-of-the-art security system is a good start. You can also look at installing security cameras and ensuring your system includes monitoring so that assistance is dispatched as soon as an incident occurs.
To make it even harder for intruders to enter the building, you can install deadbolt locks and shatterproof glass. Along with your monitoring system, including your smoke detectors and ensure you have a functioning sprinkler system to help out fires before they spread. To cover everything, you can arrange for an inspection of your electrical and plumbing and make upgrades if there is a risk for fire or flood.
Today shopping around for insurance is much easier. You can begin online, but your best bet is to speak to an insurance broker. They will have access to multiple policies and be better positioned to find the best rates and coverage for your needs.
Coverage is subject to policy wording, terms, conditions, and deductibles. Protection is limited to the perils, coverage, exclusions, and limits shown on the policy.