What is Commercial Property Insurance?

Commercial property insurance, also called business property insurance or lessor’s risk, is an essential coverage if your business operates out of a physical building. It protects your owned and leased locations, as well as equipment, inventory, other people’s property in your custody, and signage from the most common property risks including fire, theft and some weather damage. If your business can’t re-open right away after a covered loss, commercial property insurance can also help replace lost income. 

Because each business is unique and therefore faces its own set of risks, there are many types of commercial property insurance. This includes everything from builder’s risk insurance to protect against losses while your business is under construction to glass insurance, which covers broken store windows, to inland marine insurance, which covers your customers’ property on your premises or in transit. Your agent can help you decide which policy will both give you peace of mind and provide the financial support needed if an unexpected situation arises. 

For business owners who need both commercial property insurance and general liability insurance, a business owner’s policy, or BOP, is a popular choice. A BOP bundles these two common insurance types together, providing owners with a more convenient and affordable option than purchasing separate policies from the same or different carriers.  

Why do I need it?

Commercial property insurance is important coverage for business owners who operate out of a physical space, work out of their homes, are commercial property tenants or are real estate investors. If your business’ location and property could be stolen or damaged, commercial property insurance will protect these assets against total loss. Remember that commercial property insurance provides more coverage than homeowner’s insurance, so if you are a home-based business it’s a good idea to have it.

While commercial property insurance isn’t required by law, business owners should consider it as part of their insurance package. Without it, you’re stuck paying for substantial and sudden costs to replace or fix damaged property and get your business back up and running. 

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