COMMERCIAL PROPERTY INSURANCE

Has your office building collapsed due to a heavy storm? Having commercial property insurance would redeem your losses.

What is Commercial Property Insurance?

Natural disasters impact commercial businesses to a large extent. This is the reason why businesses have to face many operational and financial challenges. Damage to infrastructure, stock, and equipment needs to be repaired instantly, which is costly.

Additionally, departments like Logistics, supply chain, and production stop working. It leads to business interruption.  All these circumstances contribute to decreasing the overall revenue.

Noticing these facts, nowadays businesses are inclined to buy commercial building insurance. It's not only a contract but a surety to recover your losses against different sorts of risks. Buying it is beneficial as it protects the property against damage. For the company’s physical asset, the commercial insurance covers damages due to

●      Explosion

●      Fire

●      Vandalism

●      Storm

●      Riots

●      Theft

All these risks may damage business entities. Minimizing the financial burden on business owners is the objective for launching business property insurance. Besides the property, this insurance delivers protection against damage to equipment as well. Its repairing costs get covered under the insurance. 

Along with this, injured persons in the office premises in any case get liability coverage. 

In a nutshell, commercial property insurance helps businesses to recover from difficult situations. Supporting businesses to stand stable financially when they face downtime is an advantage. 

Advantages of Business Property Insurance

From manufacturers to non-profit organizations can take advantage of commercial premises insurance. Below are the prime advantages of investing in Business Property Insurance. 

- Monetary Protection

Commercial property insurance provides financial security in case of unforeseen events. For example, if your company premises catch fire, it can lead to significant financial losses.

In such a situation, you need to spend the maximum finances to improve the condition. If you have property insurance, then all the repair cost gets covered under the insurance. So ultimately, it saves your expenses. You do not have to spend anything from your pocket.

- Business Continuity

Any incident that happens in the commercial estate building disturbs the working flow. But repair under insurance helps businesses to prevent discontinuation. It's an immediate action taken after any incident happens. Therefore, businesses can streamline their operations within a small period.

- Third Party Coverage

Third party people who are affected by the incident happening in the building receive the coverage. Their legal and medical expenses get covered under the coverage. It helps them to manage the cost of treatment and medicines as well. Terms for employee insurance included in a building insurance plan prove more fruitful in such cases. 

- Peace of Mind

Knowing that your business physical asset is protected lets you work stress free. Due to this, you can grow your business and achieve massive success. Back of the mind, you just have to plan for your business. You are worry free about the unexpected disasters. 

Coverage Under Business Property Insurance Policy

Circumstances are explained in which you can get the commercial property insurance coverage. 

- Damage to Building

Whether you own or rent a commercial building, you can purchase building insurance. In case the building is damaged due to fire/storm, its repair costs can be covered under this insurance. 

- Damage to Machinery

Let's assume that your manufacturing machinery got damaged due to a fire in the company. It would be pricey to repair it for sure. Instead of spending money to repair the machinery, you can get the benefit of the insurance. Commercial Building Insurance prevents businesses from engaging their bucks to repair damaged machinery.

- Stock and Inventory

The company has a stock for raw materials, ready products, and other items. In case of fire, theft or natural disaster, the loss gets covered by this insurance.

- Coverage for Furniture

Any organization has a facility of desks, chairs, shelves, and other office furniture. In a nasty situation, physical assets damaged can be covered under property insurance. 

- Electrical Appliances

Offices are generally occupied with computers, servers, and other business related electronics equipment. The insurance coverage protects this equipment in case of damage or theft.   

Exclusions of Business Property Insurance Policy

Now, let’s understand what is not covered under the Business Property Insurance. 

- Wear and Tear 

- Pollution

Pollution is the biggest reason to damage commercial estates, whether it's sudden or gradual. It does not come under any activity. Commercial properties are a part of nature, which is getting polluted. It does not affect accidentally. Owing to this fact, maximum policies exclude damage caused by the contamination.

- War And Terrorism 

The damage caused by war or terrorism acts is excluded from the property insurance policy. Multiple forms of terrorist activities like bombs, biochemical attacks, may damage the building. But insurance does not provide any coverage in such circumstances. 

Grasping knowledge about the exclusions in property insurance navigates for better investment. Purchasing the cheapest one can be a better option initially. 

How to Claim Commercial Property Insurance?

Claim filing to acquire commercial property insurance coverage requires only documentation.

Let’s have knowledge to claim commercial Property Insurance. Below are the steps to register the claim

- Inform Your Insurance Provider

If an accident occurs in your building or office, inform the insurance company within 48 hours. Don't delay it, as it may affect the claim. You need to inform them about the damage. Give them the policy details like policy number, time, location, and reason of damage.

- Document the Incident

Collect photos and videos of the affected area and equipment as proof. List out the damaged or lost property along with the estimated values. Besides, collect receipts, invoices, and other maintenance records if any for proof of ownership. 

- Fill and Submit Claim Form

Receive a claim form from your insurance company. Provide every minute of information asked in the form. Input appropriate values in it. Validate the entered information is correct or not. Attach all the needed documents like incident reports, photos, invoices, and others.

Incomplete information results in rejection or may take a longer time to process. So, it is recommended to verify the details before submitting the form.

- Cooperate With Insurance Adjuster

An insurance adjuster can visit the site to examine the damage. Let them inspect everything. Provide them with the accurate information along with the necessary documents they ask for.

- Review the Settlement

Once the assessment is completed, the insurer will process a claim. With this, you may also get a settlement according to your policy coverage from the insurer. If you think that the amount is unfair, then you can ask to negotiate or can seek legal advice.

- Receive Coverage Amount

After the whole process, once the claim gets approved, you will receive compensation over the property damage. You can start to repair or replace the business damaged properties. 

What to Consider Before Buying Commercial Building Insurance?

Let's find out what things we should keep in mind first if we want to buy Commercial Building Insurance. 

- Property Valuation

Property valuation is the prime factor that is essential. It refers to the actual cost of the property and the replacement cost of the property. You ought to understand fair market value to calculate the damage coverage. Consider professional advice to determine the replacement cost of your commercial. 

- Type of Coverage Needs

Make certain that policy covers property damage, natural disasters, and theft. Verify that a third party injured in the premises gets coverage or not. Moreover, it must cover damage to physical components like furniture and electronics. Further, you must check that the insurer is compensating for cyber-attacks or not. 

- Location of Property

Before buying insurance, it is important to consider where your office/company/organization is located. From a geographical perspective, you should check the coverage amount on damaging the property due to the earthquake. 

Plus, riverside locations have the possibility of flooding. You need to think about the related terms while buying a policy plan. 

- Premiums

Premium is the unsung hero while purchasing an insurance policy. The premium amount of a policy often depends on what is covered in the policy. Therefore, before buying a policy, you must ensure how much premium you can afford to pay. Knowing financial limitations helps to make a firm decision. 

- Policy Exclusions

What is not covered in the policy is also very important. Often, when buying a policy, negligence or not paying attention to the terms of the policy can lead to losses. Therefore, before investing money in building insurance, it is important to check the excluded factors from the policy plans.  

Final Thoughts

Only safeguarding ourselves with life or health insurance is not enough, businesses need financial safeguards too. Protecting the assets from risks like fire or theft has become their priority. 

Primarily, buying commercial building insurance provides financial stability. Then it leads to business interruption and compliance with legal requirements. Apart, it’s a support system for employees too. 

Ultimately, picking the right policy with comprehensive coverage is like a boon for businesses. You can compare and lock the policy type that suits your needs. 

FAQs

1. Why should businesses purchase Commercial Property Insurance?

Financial losses due to fire, theft, or natural causes in business cannot be avoided. Repairing damage to physical electronic components or furniture is high. To cover them, it is necessary to purchase Commercial Property Insurance. 

2. Is commercial building insurance mandatory?

No, it is not mandatory, but it is recommended for all sizes of businesses. Buying commercial insurance provides monetary protection against accidental property loss. 

3. Can I customize my commercial building insurance policy?

Yes, you can adjust the policy by adding burglary, machinery breakdown terms. Also, you are allowed to set the limit for coverage. 

4. How can I lower my commercial building insurance premiums?

To lower your commercial building insurance premiums, understanding risk management strategies is essential. Implementing safety measures proactively would lower your premiums. Check the coverage limits and higher deductibles.  It also may lower your premium. 

5. Does commercial building insurance cover tenant damages?

No, commercial building insurance does not cover tenant damages, instead it provides coverage against the building damage itself, not to the people who make use of it. 

6. What’s the difference between commercial building insurance and homeowners insurance?

Commercial building insurance is a facility for business properties, whereas homeowners insurance is made for residential properties. Businesses can get more coverage in commercial building insurance than homeowners insurance.

Published on - 26/09/2015