Commercial property includes income accruing physical property of a business such as office building, shopping complexes, warehouses and factories. Possessing commercial property is associated with great risks. The risks include damage to property due to natural calamities, non-payment of rents by the tenants, fraudulent litigation against the owner of the premises, etc. Such high risks need attention, and calls for insurance to cover the risk and protect the interest of investor.
What is commercial property insurance?
A commercial property insurance policy is a comprehensive policy that covers all the possible unexpected costs of a property costs incurred from the damages occurred to the property and the costs incurred from the damages caused to others by the property (liability claims).
Things covered under this policy:
Right from property damages to the business interruption losses, commercial property insurance covers a wide range of risks of a business. Let us now see, what are all the things that this insurance policy covers.
Buildings: Buildings must be insured to protect them against natural calamities such as storms, floods, avalanches, lightning, etc. There are several insurance policies that suit your needs. For example, if you rent out your building, your business tenant is required to take tenant’s contents insurance.
Stock and equipment: Under commercial property insurance, a range of articles including fixtures, furniture, mechanical and electronic equipment, trade equipment, cash registers, weighting scales, inventory, etc., are covered. Thus, the entire contents in the building are covered. For manufacturing business, it is important to store inventory and protect it against damage and theft. These stock goods and inventory are also covered under commercial property insurance.
Improvements made by the tenants: In course of tenancy, if the tenant thinks the building is less suitable to the business, and can be made suitable by improving the look or any such aspect and thus modifies the building accordingly, then this insurance covers the cost of improvements made by the tenant.
Business interruption: Interruption to your business might occur due to different factors like natural calamities, man-made causes like vandalization, etc. Such risks are covered under commercial property insurance. Business interruption leads to non-payment of rent, wages and dividends to the shareholders of the firm. If you take business interruption policy, such liabilities would be covered.
Workers compensation: The business you do is likely to be affected by numerous factors – man-made and natural. In any case, if your employees sustain injuries or illness, the costs of hospitalization, medical expenses, etc., are covered under the policy of commercial property insurance.
Additional expenses: While executing business in a commercial building, there are some expenses that are also covered under this policy. This includes loss of the contents of the building which belongs to its owner.
Commercial property insurance thus covers a variety of risk factors you cannot afford to ignore. To get your business perform without any interruption, it is important to buy commercial property insurance.