Is commercial property insurance a legal requirement?
by Admin
Posted on 19-07-2022 06:37 AM
What’s the difference between commercial property insurance and business buildings insurance?
One way in which businesses protect their financial interests is by securing insurance that covers damage or losses that may occur due to both natural and unnatural disasters such as hurricanes, windstorms, fires, water damage, and accidents. Commercial property damage insurance is intended to provide financial relief after a disaster or accident so that a business can maintain its financial stability and avoid losing its investment due to a temporary setback.
Some of the types of incidents and accidents that commercial property insurance might cover include:
accidents caused by customers or employees
damages to company buildings or vehicles
damages to inventory or lost or destroyed inventory.
Commercial property insurance differs from commercial home insurance. Commercial property insurance covers real estate used exclusively for business use. For example, an office building that contains no residential housing is a commercial property. The owner of a commercial property would need commercial property insurance. This type of insurance covers the building’s structure and its fixtures, along with detached structures, like parking garages and maintenance buildings. If the owner also owns the business that occupies the building, she could purchase a commercial property insurance policy that also covers business equipment, furnishings, inventory and office supplies. A property owner may also need to purchase riders or separate policies to cover commercial vehicles, along with liability insurance to cover legal risks.
Insurers will apply a coinsurance penalty, essentially reducing the amount they will pay for a claim if the coinsurance minimum is not met. In cases where the property is underinsured, the insurer will reduce coverage proportionally, even if the loss is less than the limits of insurance. To arrive at the amount they will cover, insurance companies divide the limits of your policy by the limits that would be required by coinsurance. Your insurance payout would then be reduced by the percent difference between the two amounts. Examples: coinsurance minimum met: a business purchases a commercial property policy with coverage for $600,000.
Some businesses are in the business of acquiring, owning, and/or leasing real commercial real estate. These include industrial buildings, office buildings, malls, and shopping centers. These buildings have great value to the owners because they house other businesses. When covered events occur in these buildings, it is in your best interests to make the repairs quickly and efficiently for the sake of your tenants, who are the source of your income. Commercial building insurance from otterstedt insurance agency can be instrumental in helping you get your buildings back in perfect condition for commerce to resume. In this case, building ordinance coverage is an excellent add-on to your policy as it provides coverage to help you bring your building to current codes during repairs to the building after a covered loss.
What is business contents insurance?
If you run a business but don’t fully understand commercial property insurance and the impact of that coverage on your business’ contents & equipment, you need to read on as we break down the most important elements of commercial property coverage.
Commercial property insurance, also known as business property insurance, is something every company needs to protect its property – whether owned or leased. It is designed to protect a company’s property from such dangers as theft, fire, natural disasters, and more. The main benefits of commercial property insurance are it protects your building and its contents, as well as exterior fixtures, such as a fence or outdoor advertisements.