Whether you own a single retail shop or a chain of restaurants, you will need a commercial property insurance policy that covers your business’ physical assets. You will want enough coverage to replace property and key equipment after an incident.
Calculating the Value of Your Property
The most important factor in knowing how much coverage you should purchase is knowing the value of the property you are insuring. When you purchase new equipment and other items for your business, such as decorations, silverware, etc., make sure to keep records of their value so you can properly insure them.
Calculating value for the physical structure is somewhat different. For example, say you own a restaurant. The value at which you should insure this restaurant is not necessarily the same as the price you bought it. Instead, you must insure the restaurant for its total replacement cost value. The replacement cost value of a business location is how much it would cost to completely rebuild after a disaster, including material and labor costs.
There are online calculators you may use to calculate your business’ total replacement cost value. Remember to notify your insurance provider about any updates or upgrades you make to the business so that your policy can reflect the changes.
How Much Does Commercial Property Insurance Usually Cost?
Commercial property insurance premiums differ depending on many factors, including:
- Value of the insured property
- Coverage limits
You can often save money on commercial property insurance by purchasing a business owners policy, which combines commercial property insurance and general liability into a flexible policy for small businesses. On average, businesses pay around $1,000 to $3,000 for each million dollars in commercial property coverage.
Additional Property Coverages
There are also additional coverages to consider for your property insurance depending on your business’ unique needs. Useful property insurance for businesses include:
- Commercial Auto Insurance protects the business’ vehicles in case of damage or loss in accidents, natural disasters, theft and more.
- Flood Insurance covers flood damage to your business’ physical property, which is generally excluded under a basic property insurance policy.
- Equipment Breakdown insurance covers expenses for repairs or replacements if equipment suddenly breaks down. This does not cover breakdowns caused by negligence or intentional damage.
- Crime Insurance compensates the business in case of theft, fraud, embezzlement and more committed by an employee.
Also Read: Commercial Property Insurance Can Protect Your Onsite Equipment
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