Commercial Property

What is Commercial Property Insurance?

Commercial property insurance is a form of insurance that provides coverage for businesses against potential financial losses due to damages or losses to their property. This insurance is designed specifically for commercial properties such as offices, retail stores, warehouses, or manufacturing facilities. It protects businesses from various risks like fire, theft, vandalism, or natural disasters. Commercial property insurance is essential for business owners as it safeguards their investments and provides financial security in case of unforeseen events that might jeopardize their operations.

Commercial property insurance offers comprehensive protection for both owned and leased properties, safeguarding not only the physical structure but also the essential tools and equipment crucial for your business operations. This invaluable coverage shields against various potential sources of loss, including:

• Burglary
• Fire
• Lightning
• Theft
• Wind

Home-based business owners benefit from a broader scope of coverage with this form of commercial insurance, surpassing the limited protection offered by homeowners insurance. This insurance variant may have been introduced to you under different aliases in the past:

• Business personal property insurance
• Commercial building insurance
• Commercial real estate insurance
• Non-residential building insurance

How Does Commercial Property Insurance Work and What Does It Cover?

Commercial Property insurance provides coverage for the tangible assets of your business, including but not limited to:

• Building 
• Equipment 
• Inventory
• Furniture
• Personal property
• Tools 

It encompasses business interruption coverage as well, which aids in compensating for the loss of earnings if your business becomes inoperable due to property damages included in the policy.

Is commercial property insurance for you?

If you run a business, having commercial property insurance can prove beneficial in various situations.

• A building, supported by insurance policies catering to business occupants, is struck by the powerful force of lightning.
• Your computers suffer severe damage or complete destruction caused by a fire.
• Your inventory is stolen by an intruder who gains unauthorized entry into your premises.

How Much Does Commercial Property Insurance cost?

On average, SeaCastle customers pay around $1,500 per year for commercial property insurance. Please note your individual premium may vary considerably from this estimate based on various factors such as:

• Neighborhood: If your establishment is situated in a densely populated region where the likelihood of criminal activities or acts of vandalism is heightened, you might be subject to an elevated fee.
• Type of construction: The type of construction and the material(s) used in constructing your property will play a significant role in determining the cost of your commercial property insurance. The materials utilized in building your premises have the potential to affect this aspect. Take for instance buildings constructed with fire-resistant materials, which generally attract lower insurance premiums.
• Occupant Type: Higher insurance costs are expected for businesses that have a large number of individuals frequently present, such as restaurants.
• Fire and other risks: Enhance security provisions to safeguard against fire and potential risks: Incorporating protective measures such as smoke sensors and anti-theft systems at your business premises can potentially reduce your insurance premium.

How Do We Value and Insure a Commercial Property?

Insurance companies assess the worth of commercial property using three distinct methods: 

ACV: Actual cash value: How much it’d cost to replace an item, less depreciation. Depreciation is primarily calculated based on the age of the item, and it’s actual and expected condition and wear and tear.

Fair market value: Present day value of the item put up for sale in today’s market conditions.

RCV: Replacement cost value: The amount of money it would cost today to replace the same or similar item. 

Commercial Property Insurance exclusions

It is important to note that your insurance policy for commercial property does not provide coverage for all forms of property damage. Consequently, this type of insurance will not provide assistance to your business in the following scenarios:

• Customer drops equipment or machinery as they bumped into a table in your office
• Your employee breaks a glass wall in your customer’s office
• You get into an accident while driving for business and damage your vehicle
• Flooding damages your inventory
• A disgruntled employee intentionally destroys property

Expand your range of commercial insurance coverage to safeguard your business from an array of potential claims. Take a proactive step towards securing optimal protection for your business by obtaining an insurance quote today. Discover the various types of insurance available and explore how they can effectively shield your business. 

Bundle coverages for best protection

Commercial Property Insurance with a Business Owner’s Policy (BOP)

One option is to obtain individual commercial property insurance, however, numerous small enterprises opt for a more comprehensive approach by acquiring a Business Owner’s Policy (BOP) that offers a combination of three crucial coverages:

• Business Income Insurance
• Commercial Property Insurance
• General Liability Insurance

Techniques for Minimizing Your Exposure

There are effective and time tested ways to minimize your business risk exposure. One approach is to establish a routine for inspecting and evaluating systems such as CO2, fire, and smoke alarms and sprinkler systems in your commercial premises and you personal home office. A disciplined approach ensures all systems are functioning as expected and are protecting your assets, belongings, and structure. In addition to ensuring you are adequately prepared if and when a catastrophe strikes, this also brings peace of mind. Good systems in working order reduce any potential threats and business downtime. 

Our Risk Assessment team is here to assess and analyze your mitigation plans, including but not limited to: 

• Creating and promoting a safe working environment
• Minimize losses 
• Creating workflow efficiencies

Despite all precautions, if and when the unfortunate situation arises, we are here to help. Please reach out to file a Commercial Property claim. We understand you have a lot of other things to think about and make the process easy.