Commercial real estate insurance helps protect your business from the exponential risks it faces due to nature and human-caused damage. Not keeping your business protected only doubles your risk when you consider you already face enough financial dangers. The type of damage to your property might not always be what you expect either.
It’s true we’re living in a more volatile world where any type of situation could occur. That’s why it’s imperative to have some form of commercial insurance to protect yourself from possible bankruptcy.
The biggest challenge is finding what type of commercial real estate insurance you need. With various coverage options available, what should you choose?
What’s important is paying only for what you really need since every insurer is going to offer variations. In some cases, you may have package insurance giving you everything in one policy.
Let’s look at what you’ll typically find in your business owner policy and the assets you need to protect.
General Coverage in Your Policy
Most general real estate insurance covers all the buildings you own as part of your business franchise. If you own several buildings, you can usually name these as declarations in the policy’s first pages.
Everything you use inside each building gets protection, and this includes machinery and other equipment to keep your business running. It also means appliances used to keep your building serviced. Even outdoor fixtures are usually covered.
You’ll usually get a choice between “actual cash value” coverage or a policy giving you replacement cost. These are quite different, and you need to talk to your agent about which is better for you.
Actual cash value helps replace items at their current worth. Replacement costs goes by what it would cost to replace everything after rebuilding. Since building costs are usually substantial, the latter option is perhaps best for you.
Naming the Types of Losses You May Suffer
Some policies give you a chance to write in things you’ll be covered for, though this can cost you more. Nevertheless, your regular policy may not include everything you need for complete coverage.
After you’ve done an analysis of probable things that could destroy your business, you can add them in there. Some of these might include obscure disasters like sinkholes or volcanic eruptions. Yet, these aren’t necessarily obscure when you hear about how many of each occur worldwide.
More typical things to cover would be floods, fires, and human damage like vandalism.
What Isn’t Covered in Your Real Estate Insurance?
You may have property loss due to other circumstances sometimes not covered in every policy. Employee dishonesty is one of the most common things excluded in many property insurances since this isn’t a predictable disaster. The same goes for basic wear and tear since you’re responsible for maintenance.
Power failures aren’t always covered either unless it causes damage to your equipment. Also, if you have no evidence in how a missing business asset occurred, it’s more challenging to get it covered.
Keep in mind some of these things can still get covered through separate policies if you think they’re a real threat.
Separate Policies to Help You Get Back On Your Feet
While property coverage and personal property are usually two separate policies, you may want an additional policy to protect your income. Many companies provide all three, though the latter is essential to help you keep things running while you rebuild.
Chances are, you’ll have lost income after a disaster with your business, and this gives you the money you need, plus covering payroll expenses.
To learn more about our own commercial real estate insurance and rates, contact us here at Brier Grieves Insurance.