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Commercial property insurance is used to cover any commercial property. Commercial property insurance protects commercial property from such perils as fire, theft, and natural disaster. A variety of businesses, including manufacturers, retailers, service-oriented businesses, and not-for-profit organizations carry commercial property insurance. It is generally bundled together with other forms of insurance, such as commercial general liability insurance.
Commercial property insurance can be a major expense for businesses that use equipment worth millions or billions of dollars, such as railroads and manufacturers. This insurance essentially provides the same kind of protection as property insurance for consumers. However, businesses can usually deduct the cost of commercial property insurance premiums as expenses. Commercial property insurance generally does not cover losses arising from tenants using the building.
When determining how much a company should pay for commercial property insurance, the value of a business' assets, including the building, is the primary factor. Before meeting with an agent to discuss coverage, a company should take an inventory of their physical assets located at their property. This information will help determine what exactly would be the replacement value and the level of coverage the business should get.
With an increase in the number of natural disasters, weather conditions in the area where the building is located have also become an important factor in determining the cost of commercial property insurance. Commercial insurance rates are generally higher for properties located in the vicinity or inside geographies with significant risk of weather-related catastrophes. For example, rates are higher for properties located near regions prone to wildfires in California.
Some particular places on your property to consider insuring include:
Commercial property insurance can be used to cover a variety of situations. For example, it can be used to claim damages if a fire destroys your office equipment. Commercial property insurance is also useful in case of a theft. It can also be used to make claims in case of a natural disaster. For example, Hurricane Maria's impact in Puerto Rico left insurers dealing with 279,000 claims.
Written by Julia Kagan