What Is Property Insurance?
Business property insurance policies – sometimes called commercial property insurance – protect your property, as well as inventory or assets, against loss or damage caused by theft, an accident or some other means. Your business property insurance protects you even if the property is away from your place of business when it is damaged or lost. The policy covers your costs to replace or repair the property and, in some instances, compensates you for items that cannot be replaced.
Companies frequently purchase commercial property insurance as a part of a Business Owner’s Policy, which offers a way for low-risk companies to purchase two of the most valuable types of insurance - business property insurance and commercial general liability insurance – in a single, affordable package. Click here to see if your company qualifies for a Business Owner’s Policy.
How does property insurance protect your business?
Commercial property insurance is one of the first types of insurance you should look into when you launch a new enterprise. This coverage protects you from some of the risk that the property your company owns could be lost, stolen or damaged.
If you don’t own the building where you do business, you'll only need to cover the building’s contents. The basic commercial property insurance policy protects your investment in fixtures, furniture, office equipment, inventory and the supplies that you store either at your business location or off-site.
Business property insurance premiums will vary depending on whether they cover replacement cost or actual cash value (ACV). A replacement-cost policy ensures that your settlement is based on what you will have to spend to replace the items at current market prices, while an actual cash value policy reimburses you for the property’s depreciated value.
Replacement-cost small-business property insurance policies have higher premiums, but because they allow you to replace all lost or damaged property with new items, such policies can help your business quickly recover from a loss. Also, if you are leasing any equipment, your leaseholder may insist that the property be insured for its replacement value. That’s why most property insurance coverage is written on a replacement-value basis.
However, if your business owns its own equipment, and you could easily replace lost equipment with comparable used goods for the depreciated market value, an ACV policy’s lower premium may be more cost-effective.
We can help you secure the best commercial property insurance for your small business’s budget and needs – whatever those needs may be.