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What Is Business Property Insurance and Do I Need It?

Many businesses spend years accumulating and investing in the property they need to run their operations. “Property” isn’t just a physical building—it can include everything from tools and machinery to computers and furniture. All told, there are typically thousands, if not hundreds of thousands, of dollars tied up in all the business’s assets. That’s a lot of money, and it can be prohibitively expensive to repair or replace your property if catastrophe strikes.

Insurance is a mechanism to protect that property. By paying a monthly or annual premium on a business property policy, owners can offset their risk.

What is business property insurance?

This type of insurance, also known as commercial property insurance, protects assets that your business owns from damage or loss by fire, theft, vandalism, natural disasters, and other perils. If the worst happens, your coverage will kick in to help repair or replace buildings, equipment, inventory, furniture, and other property that your business owns.

Who needs business property insurance?

As you might guess, this coverage is designed for businesses or individuals who own real estate, as well as for businesses that own or lease physical property, such as brick-and-mortar stores, offices, warehouses, factories, or workshops. It’s also highly recommended for businesses that take property, such as tools, equipment, or inventory, to different locations.

Types of Business Property Insurance

Business property insurance is a broad term that can include several different types of policies. These include:

  • Commercial Building Insurance: Covers the structure and permanently attached fixtures of the building.
  • Contents Insurance: Covers items inside the building, such as computers, furniture, inventory, equipment, etc.
  • Inland Marine Insurance: Covers the property that is in transit or stored at different locations, such as contractor tools, heavy equipment, items rented to others, and more.
  • Builders Risk Insurance: Covers buildings that are actively under construction.
  • Equipment Breakdown Insurance: Covers the cost of repairing or replacing equipment (e.g. refrigeration systems, HVAC systems, manufacturing equipment) that’s been damaged due to mechanical or electrical failure.

Tips When Purchasing Business Property Insurance

There is no “secret menu” to ask your insurance provider for, like you would at your local Starbucks, to get a special offering. But you can use some smart strategies to obtain the best coverage and prices.

First, small or mid-market businesses should always try to bundle business property insurance with a business owners policy (BOP) or a commercial package. This helps you get a high-quality policy with a low premium, versus purchasing individual property policies. (Note: Specialty policies like inland marine or heavy equipment insurance might still need to be purchased separately.)

Secondly, know the range of deductibles you want before you request a quote. The higher the deductible, the lower the premium, so it’s important to know your financial capacity for paying out of pocket before you even begin to shop for policies.

Finally, review the exclusions and the endorsements of the policy. Carefully. You need to know exactly what scenarios you will (or won’t) be covered for, and plan accordingly. This is the fine print you don’t want to be surprised by when you submit a claim.

How to Find a Quality Business Property Insurance Policy

Like most things in life, you need to find someone you can trust when you are shopping for insurance. Find and work with an insurance agent that specializes in commercial insurance and has a solid reputation in the industry.

Also, don’t forget that while you are interviewing insurance providers, they are also interviewing you. Put your best foot forward and let them know how your business or property is superior to others in your industry. Be prepared to show evidence of your safety protocols and history, financial stability, and operational soundness.

LandesBlosch can do all the legwork for you. It’s our job to learn about your business, and then collect several quotes from different providers based on your specific needs. Our risk advisors will guide you through your choices, explain pros and cons, and help you get the highest quality coverage at the most affordable rate. We have been helping people get the coverage they need for over 100 years, and would love to work with you, too. Contact us for a free, fast quote.

Austin Landes, CIC

About The Author: Austin Landes, CIC

Austin is an experienced Commercial Risk Advisor specializing in property & casualty risk management for religious institutions, real estate, construction, and manufacturing.

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