Commercial Property

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Protect Your Business Assets with Comprehensive Commercial Property Insurance

Understanding Commercial Property Insurance

Commercial Property insurance covers company owned physical assets, used to run your business.  The coverage can be called business property or commercial property insurance. Included in this category are owned buildings, your tools and equipment, inventory, computers, appliances, furniture and even expensive paintings you have hung in the reception area. Through a business property insurance policy, all these assets can be covered in case there is a theft, fire or damage occurring through natural disasters such as hurricanes.

Flood insurance is almost always covered on a separate policy, earthquake coverage may or may not be able to be added to a property policy, just check with your agent if you are located in an earthquake zone. Purchasing commercial property insurance enables the property owner to protect the business assets against loss so he can resume operations as quickly as possible without incurring any expenses other than the policy deductible(s).

Business Interruption (aka Business Income) coverage is also covered under a commercial property policy. This coverage replaces income lost due to direct damage to your location from a covered peril which forces your business to close. Business Interruption coverage is not automatically included in a property policy, you must request it be added. We recommend purchasing a minimum limit of 12 months of Business Income less any non-continuing expenses.  Lost revenue, day-to-day ongoing expenses like payroll for key employees, expediting replacement equipment and relocation to a temporary space are just some of the items that this type of insurance will pay for. Many businesses do not survive after a major property loss or supply chain disruption. Business income coverage can help get your business operational and profitable again.

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Types of Commercial Property Insurance

Commercial property insurance protects your business's physical assets, whether you are the owner of your freestanding building or rent commercial space for your operations.

Unlike individual homeowner’s insurance, commercial property insurance covers business-owned property. Moreover, commercial property and casualty insurers and agents are trained in the hazards and threats to an enterprise that relates to operations in a particular industry.

Business property insurance is exceptionally adaptable and often covers many physical assets, though to get more broad coverage on sensitive electronic equipment, medical equipment, and larger computer or server centers will need to get inland marine to cover damage from a power surge that occurs when the power comes back on after electric has been offline or during brown-out situations.

There are a variety of different types of commercial insurance that small business owners should look into. Some of the most common include:

  • General Liability  
  • Property Insurance
  • Business Interruption Insurance
  • Commercial Package/Business Owners Policy
  • Workers’ Compensation Insurance
  • Commercial Auto Insurance
  • Employment Practices Liability Insurance (EPLI)
  • Cyber Liability Insurance
  • Management Liability Insurance (D&O)
  • Errors and Omissions Insurance (E&O)
  • Crime Coverage
view of two tall skyscrapers from below

General Liability

General liability insurance covers the medical costs and legal defense fees that you might inadvertently be responsible for due to a misdemeanor or felony committed by one of your employees at your business location. This insurance also covers "advertising injury," an offense like copyright infringement and libel.

Property Insurance

Property insurance insures your building, contents, and your lost earnings in the case of a commercial building's damage or loss by fire, theft, or covered natural disaster. Property insurance coverage can be "named risk," also known as Basic or Broad coverage forms, and what used to be called “All Risk” which is known now as Special Form. A special form property policy covers everything EXCEPT what is specifically excluded. The term “all-risk” was a bit misleading since no insurance policy covers all risks, there are always exclusions.

Business Interruption Insurance

A significant storm, fire or riot, or a cyberattack, all of these could cause your business to lose revenue. With business interruption coverage, you can rest assured that your income from your business will be covered if you’re not able to conduct normal business operations because of covered damage to the building structure where you are located. There must be direct physical damage to the building that causes the interruption in your business for coverage to be triggered. This policy provides economic protection to support your business in times of disaster. Your lost revenue can be reimbursed by the insurance carrier so you can meet financial obligations.

Workers’ Compensation

Small company owners may try to convince themselves that they don't need workers' comp insurance. That's not true because an employee injury could happen at their business at any time. In states where your number of employees means your business doesn’t have to purchase a policy does not mean that the business is not liable for employee injuries. If an employee gets hurt, no matter how many staff are employed, the business will always be liable for the employee’s injury while on the job. This means the state required lost earnings and all medical care required by statute for the injured worker. Some businesses erroneously think if the state doesn’t require workers’ compensation insurance that their business is off the hook for employee injuries.

Commercial Auto Insurance

Small businesses should consider commercial auto insurance to protect their business from auto liability claims if there are owned vehicles. Regardless of the vehicle type, private passenger, pick-up, box truck, or semi, state laws require auto insurance. When a vehicle is in an accident, the use of the vehicle is considered, was it personal use or business-related? Personal auto insurance may not cover business use of a vehicle so to be sure you aren’t stuck paying for accident damages out of pocket, have the right coverage in place before an accident occurs.

Required auto coverage typically includes the following: Auto bodily injury and property damage liability, Personal Injury Protection also known as No-Fault coverage in some states, Uninsured or Underinsured Motorists, Comprehensive and Collision physical damage, Hired and Employers Non Owned Auto Liability, Rental Reimbursement and many other options available to purchase.

Employment Practices Liability Insurance (EPLI)

Any business may face employment practices liability-related claims as much as property or general liability claims. Your business may benefit from employment practices liability insurance (EPLI) coverage. Breaching an employee's rights may land you in hot water with the Equal Employment Opportunity Commission (EEOC). Think of allegations of wrongful hiring or firing practices, discrimination of any kind, hostile work environment, and other wrongful acts are covered by this policy.

EPLI provides defense for the employer and court costs, settlement costs, and awarded damages up to the limit on the insurance policy. Coverage applies whether the case is won, lost, or thrown out for covered acts in the policy. This policy can also provide third-party discrimination charges against a company. These incidents are brought by customers, visitors, or the general public who feel they have been discriminated against by the insured business.

Cyber Insurance

Smaller businesses are mainly targeted because they're more vulnerable than larger businesses. Cyber insurance can be essential to minimize this risk.

Cyber insurance typically covers losses incurred from data leaks or breaches. During a hacking attack, your customers’ data, including names, telephone numbers, addresses, driver's license numbers, health records, and even Social Security numbers, may be put in the hands of criminals.

The insured company will be protected from cyber liability claims and suits from customers whose data was compromised in these situations. There may be allegations the company was using outdated security software which allowed the attack to occur. It covers the data breach's expenses, including legal requirements like client notification and credit monitoring costs.

Remember the first-party coverage provided on a cyber policy, it can also cover funds transfer fraud, ransom, loss of income, and system damage caused by cyber criminals.

Management Liability Insurance (D&O)

Directors and officers (D&O) liability insurance, also known as management liability insurance, guards directors and officers if they get personally sued in a lawsuit while managing or being on the board of directors of a company or nonprofit organization. Costs and damages resulting from covered wrongful act claims against the board of directors or an officer of an organization are covered on a D&O policy.

Depending on the coverage form, this policy may “pay on behalf” of the D&Os or it will retroactively reimburse legal defense expenditures to the officers or directors involved in a legal proceeding. Directors or officers are responsible for their acts while on the board and may be made part of a lawsuit even if they no longer work for the firm if the accusation of the wrongful act happened while on the board.

Errors and Omissions Insurance (E&O)

Professional liability insurance is also called E&O insurance. It provides coverage if an error or omission is made by the owner or an employee of a business, resulting in litigation. Organizations and individuals that have licenses, certifications, and degrees and that charge for their services should consider investing in professional liability coverage. With only a general liability policy, there are gaps in coverage for the professional.

Medical practitioners, real estate agents, security and investment advisors, lawyers, accountants, insurance agents, architects, engineers, and other professionals must consider purchasing errors and omissions insurance, among others.

Crime Coverage

Protecting commercial entities from crime is a goal of commercial crime coverage. This insurance encompasses employee theft, computer and electronic funds transfer fraud, fraudulent impersonation, and theft of customer property by an employee.

Why should you insure your business property?

Running a business is not child play and as the owner, it is up to you to make good decisions for your business. If you are a distributor and fire engulfs your building and inventory, wouldn’t you like to be confident that your business can recover with as little disruption as possible? If your office is burglarized and all the computers and other contents of the office are stolen, a Special Form Business Property policy would be available to pay your claim and if you have replacement cost coverage, you will be able to replace your old property with new. If you have on your building or contents the bank or finance company will require evidence of property insurance.

Let us look further into the perils covered under Special Form Commercial Property insurance to be fully aware about why business owners must consider business property insurance.

Burglary and Theft

Theft of your office computers and equipment can put a stop to your operations. Without a special form property policy, you will not have any coverage to replace your stolen property and, recovery from this type of loss will be difficult.

Wildfires and Hurricanes

Imagine that you own an electronics shop in an area prone to wildfires. Due to drought conditions and record-breaking heat, a wildfire spreads to your business. Your business suffers a total loss and everything is gone. A small business owner might not have the financial building and contents. Commercial property insurance will pay for a new building and contents if you have replacement cost coverage.

Vandalism, Riot and Civil Commotion

Damage to your building insured caused by a riot in which participant vandalize your location, breaking windows or causing intentional damage is insured.


With today’s consumer large amount of sensitive electronic equipment, smart TVs, laptops, tablets, desktop computers, printers and smart speakers, all can be damaged with one strike of lightning to your building unless you have lighting protection.  Surge protectors used with your electronic equipment help but may not totally protect your equipment.

Third- Liability

Be aware of your policy's exclusion. Some typical exclusions on a special form property include:

  • War/Nuclear damage
  • Off premises utility
  • Water, Flood, Tidal Waves or overflow of body of water
  • Earthquake
  • Employee theft
  • Wear and tear, rust, corrosion, decay, deterioration
  • Ordinance and law
  • Animals
  • Land
Nurses taking patients for a walk in the open area in a hospital

Small Business:

Businesses have Right from the conception of your idea to the execution and the running of it, your business goes from the early stage to a fully established and profitable one. You may require different insurance for each phase of your business.

Start up

While in the startup stage, the business owner buys or rents commercial space. He must set up the location to serve the operations planned. He may need to update the wiring for the internet,computers and printers. Acquisition of the appropriate equipment, furniture and fixtures,supplies, hand tools, may all be needed. If there is a business loan, the bank or financing company will require evidence of property insurance before they will provide financing to you.


As your sales and customer acquisition increase, you will want to consider insuring for loss of business income in the event the business suffers damage from a covered peril and has to close for a period of time. Business interruption along with extra expense should be purchased which will provide a cushion for lost income. This coverage may continue to supplement your income even after you are reopened, since sales are down from prior year because your customers don't realize you have reopened.  Remember to keep an eye on the value of your business assets when compared to your business contents limit on your policy to assure you have sufficient limits insured.


At this point in your business, you may be financially more secure, build up a nice business bank account and are willing to accept more risk. You may consider increasing your deductibles, self-insuring some exposures or increasing limits on all policies. If you purchase new equipment with the latest technology, you will want to keep an eye on your property insured values and adjust accordingly to cover any new purchases.

Here is a list of endorsements that can be added to a commercial property insurance policy:

  • Business Interruption- for a covered claim will replace lost income and provide reimbursement for ongoing expenses to get your operations up and running.
  • Coverage for outdoor property such as owned satellite dish, antennae, fences, gazebos, etc.
  • Off premises property for instance if you have a booth at a convention or event.
  • Building Ordinance
  • Seasonal adjustment in values for an inventory
  • Coverage for customer's property in your care
  • Replacement Cost Valuation
An empty swimming pool inside a hotel

Other types of policies coverage Business Assets:


  • Crime, covers employee dishonesty and fraudulent bank transactions
  • Inland Marine, scheduled or unscheduled, covers mobile equipment that is used away from your location (backhoe, loader, scissor lift, landscaping equipment)
  • Builders Risk, covers a building under construction or renovation during the construction process
  • Transit, also called transportation, covers your property while in transit
  • Flood insurance, protects for damage caused by rising water
  • Earthquake
  • Equipment Breakdown, damage caused to your assets caused by mechanical breakdown

Commercial Property Insurance Cost

The value of your building, equipment, and other factors like location and construction type, year built, and security features all determine your business’s overall property insurance premium. These attributes along with an insurance company’s rates are factored in when determining the cost of property insurance (sometimes called hazard insurance).

There is no average rate or premium that can be given for commercial property insurance without consideration of the factors mentioned above. Commercial property in FL may have a rate of $2 per $100 of value while in Montana, the rate is $0.20 per $100 of value. Location, location, location means everything!

Why trust us?

We offer all types of commercial property insurance and will make sure no aspect of your operation has been overlooked. We walk you through our coverage plans to help you make an informed decision. We understand your needs and help you select the coverage best tailored for your business needs.

Frequently Asked Questions (FAQ) about Commercial Property Insurance

1. What is commercial property and casualty insurance?

Commercial property insurance- A complete business property insurance policy is one of the quickest steps to safeguard your business's expensive assets. It replaces damaged or stolen physical assets such as its building, furnishings, and outdoor fixtures such as signs and fencing (if specifically endorsed on the property policy) for covered perils. It covers losses from many sources, such as:

  • Fire
  • Burglary
  • Theft
  • Wind
  • Lightning
  • Riot or Civil Commotion
  • Vandalism

For business owners, commercial property insurance provides similar coverage to homeowners insurance. This insurance is also known as:

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

Commercial Property Insurance insures your commercial assets while located at your business premises, such as your:

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

The property policy also helps replace your lost revenue if you cannot operate your business due to covered building damage.

Flood and Earthquakes most likely will not be covered on a commercial property policy, depending on the risk of these perils on the commercial property insured, a separate policy most likely would be needed for these. Casualty Insurance – also called General Liability, Casualty insurance is a broad category of insurance coverage that protects you against liability claims for property damage or bodily injury caused by your business’s negligence or mistake. Liability is the main factor in casualty insurance. It means that your insurance company will pick up the cost when your business is responsible for causing injury or damage resulting from your operations and employees. For that reason, it is pretty widespread in terms of commercial insurance needs.

2. What are the benefits of multi-property landlord insurance?

Multi-property landlord insurance is specially designed for owners of multiple tenant-occupied properties. Landlords seeking insurance on all of their properties can benefit from it. Multi-property insurance bundles the lessor’s locations on one policy to easily manage the insurance.

One of the essential features of a multi-property insurance plan may be that insurance is more affordable as opposed to insuring each one independently. A multi-property policy also saves you time because you just need to renew it once each year, and it is easy to add or remove your locations when buying or selling property.

3. Who pays for commercial property insurance?

Commercial property is a significant investment, so it’s critical that the property insurance you purchase adequately protects your investment. When an owner-occupied building is insured, the building owner pays for their insurance premiums. Unlike some homeowners’ policies where the insurance is part of an escrow account where the mortgagee pays the premium, most business-owned real estate is not and the business pays its premium.

Click here for more Frequently Asked Questions on Commercial Property Insurance. 

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