If you are the owner and operator of a small to medium-sized business, then you have considerable experience with the unexpected. It is also highly likely that you have a large number of your financial resources invested in your company. You need to plan to protect your business and your assets.
The recent global crisis caused by the pandemic blindsided many and shook businesses to their foundations. The events you can never imagine happening are what make commercial property insurance a critical piece of cover for all companies.
Who Needs Commercial Property Insurance Cover?
Generally speaking, commercial property insurance is universally sought after as a safety net in the event of a terrible occurrence. Without this cover, you are responsible for all of the losses should an unforeseen event occur.
Several vital people certainly benefit from investing in a commercial property insurance policy. Regardless of your specific role, be sure to speak with your business insurance expert to find out what cover you might need.
- Property/Business Owner
- Property Manager
- Business Owner Leasing A Building
- Property Developer
What Will a Commercial Property Insurance Policy Cover?
While the specifics of your policy can vary, a large number of commercial property insurance policies will cover the following events:
- A loss or damage to your property
- Water damage due to problems with water systems such as broken pipes or water mains
- Accidental damage to the property
- Losses caused by riots or civil unrest
- Damage or losses to your stock or property because of theft or attempted theft
- Damages to your property caused by falling trees or buildings or the impact of watercraft or vehicles
- Machinery breakdown frequently includes computer equipment, boilers, electronic machinery and others
- Loss of or damage to signs or glass on your property
Potentially, your commercial property insurance policy can cover:
- Snow, sleet, or hail
- Water, wind, and rain
What Are the Options for Specific Types of Cover Available Through a Commercial Property Insurance Policy?
Even though the basis for the commercial property insurance industry is building and contents insurances, the sector expanded to include some specialised cover.
These types of insurance include:
Loss of Attraction- Anchor Tenants
The option for loss of attraction cover helps you experience a disruption of the regular flow of business. For example- Daniel owns a small strip mall with a popular grocery store on one end and a well-known department store on the other. If one or both of these anchors go out of business or relocate, Daniel’s property will lose a significant amount of customer traffic and revenue. A loss of attraction- anchor tenants policy will help cover the losses.
A lease incentive option will help to cover costs associated with attracting new tenants to the property. In the case of the example, Daniel may need to motivate tenants with rent reductions or remodelling of the storefront.
Loss of Attraction- General Area
If the vicinity around an insured shop experiences a significant loss that disrupts normal business operations, a loss of attraction- general area policy will help with the losses.
What Are Some Common Mistakes Made When Getting Commercial Property Insurance?
It is easy to believe all the essential details are looking good when glancing over a policy. However, there are a few areas that need extra attention and may cause problems later if unaddressed now.
It is remarkably easy to underestimate the costs of reinstating a building, replacing machines and equipment or restocking.
Not Getting Business Interruption Cover
Having a business interruption policy can be the difference between many businesses surviving an event that forces the company to stop and the business closing forever.
Unaware of Exclusions in the Policy
Knowing the important details of your policy is nearly as crucial as having the insurance cover. An insurance expert should go over all of the ins and outs of your cover, especially the items not a part of the cover.
Not Updating Your Insurance Policy
The easiest way to avoid the unwelcome news of being underinsured is to get a yearly checkup for your policy.
A significant number of errors are preventable, in this as well as other areas of insurance. When you invest the time needed to get expert advice from an experienced professional, you have the advantage of working with someone who knows what to look for and areas that fall between the cracks.
Making sure your commercial property insurance is on par does not take much time or effort, but it can save you and your business untold losses.
*Please Note* The material presented here does not constitute legally binding insurance advice and implies no warranty. As it is for informational use, you should confer with an insurance professional for one on one consulting to assess your insurance coverage needs.