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What Is Commercial Property Insurance?
Commercial property insurance helps protect your owned or rented building, plus the tools and equipment you use to operate your business. It covers losses from many sources, such as:
- Fire
- Burglary
- Theft
- Wind
- Lightning
For home-based business owners, this type of commercial insurance provides more coverage than homeowners insurance. You may have heard other names for this type of insurance, like:
- Commercial building insurance
- Business personal property insurance
- Commercial real estate insurance
- Non-residential building insurance
What Does Business Property Insurance Cover and Why Is It Important?
What does commercial property insurance cover exactly? Commercial building insurance helps protect your business’ physical assets, such as your:
- Building
- Equipment
- Tools
- Inventory
- Furniture
- Personal property
Commercial property insurance is important because without it, your business would have to pay out of pocket to repair or replace your business property if it’s damaged by a covered loss. This coverage also includes business interruption insurance, which will help replace your lost income in case you can’t operate your business because of covered property damage.
Who Needs Commercial Property Insurance
Any business that operates out of a building faces risks to their business’ property. If you own or rent any building or property for your business, you’ll need protection against unexpected events, like lightning or windstorms, fire, theft and vandalism. Although many types of businesses will benefit from having commercial property insurance, it’s common for these industries to have this coverage:
- Beauty Salons
- Consultants
- Photographers
- Retail Stores
- Restaurants
- Technology Firms
How Much Is Commercial Property Insurance and How Is the Cost Calculated?
Customers of The Hartford pay about $1,605 a year on average for commercial property insurance.2 However, your commercial property insurance cost may be higher or lower than that amount depending on factors like:
- Location: If your business is located in a populated area that has higher risk for crime or vandalism, you may pay a higher rate.
- Construction: Materials used in the construction of your business can impact your commercial property insurance cost. For example, buildings made from fire-resistant materials will typically cost less to insure.
- Occupancy: Businesses with larger amounts of people consistently on the premises, like restaurants, will likely pay higher insurance costs.
- Fire and threat protection: Installing safety features like smoke detectors and burglar alarms at your business may help lower your rate.
How Do You Value Commercial Property for Insurance?
Insurance companies value commercial property in three ways:
- Actual cash value: How much it’d cost to replace an item, minus its depreciation (meaning how old it is or its condition).
- Replacement cost value: How much it’d cost to replace an item with something similar or the same.
- Fair market value: The cost of an item if it were to go on the market today.
Derby Industries – Commercial Property Insurance Testimonial
When Derby Industries experienced a catastrophic property loss, The Hartford did what we do best: restore lives and businesses. Watch the video and see how we helped get them back up and running.
What Doesn’t Property Insurance for Commercial Buildings Cover?
Be aware that your commercial property insurance policy doesn’t cover every type of property damage. This coverage can’t help your business if:
- Your customer drops their laptop when they trip over a box in your office
- One of your employees puts a hole in your client’s wall
- You get into an accident while making a delivery to a customer and damage your vehicle
- A nearby brook overflows after a heavy rainfall causes flooding near your building and damages your inventory
- You or your employees intentionally damage property
You can get other types of commercial insurance to give your business more protection against these kinds of claims. Get an insurance quote today and see how you can protect your business best.
Bundle Commercial Property Insurance With Essential Coverage Through a Business Owner’s Policy (BOP)
You can get commercial property insurance as a standalone policy. But many small businesses choose to get a Business Owner’s Policy (BOP), which combines three types of essential coverage, including:
Commercial Property Insurance
Commercial property insurance helps protect your business’ building and tools that you use to operate.
General Liability Insurance
General liability insurance helps cover claims that your business caused:
- Bodily injury
- Property damage
- Reputational harm, like libel or slander
Business Income Insurance
Business income insurance, or business interruption insurance, helps replace lost income if you can’t operate because of covered property damage.
Making a Commercial Property Insurance Claim
We make it easy for you to file a commercial property insurance claim online or by calling 800-327-3638.
Commercial Property Insurance for Your Business
We offer a wide range of insurance to help protect your company. You can combine your commercial property insurance with different types of coverage.
Frequently Asked Questions About Commercial Property Insurance
Get answers to some frequently asked questions about commercial property insurance.
Do I Need Commercial Property Insurance?
If you own, rent or lease commercial property of any kind, then you should have commercial property insurance. Without it, you’d be responsible for paying the costs to fix or replace your damaged business property. Your policy can provide the replacement cost value, actual cash value or market value for your business property.
What Is Evidence of Commercial Property Insurance?
Evidence of commercial property insurance is also known as proof of insurance or a certificate of insurance (COI). Your company may need a COI to prove you have commercial property coverage. We know your time is valuable, so we make it quick and easy to get a certificate of insurance online.
What Are the Different Types of Commercial Insurance?
There are many different types of commercial insurance that can help protect your company from various claims. They include:
What Is the Standard Deductible in a Commercial Property Insurance Policy?
Deductible amounts can vary and can range from a couple hundred to a few thousand dollars. You’ll choose a deductible amount when you get your commercial property insurance policy. Generally, if you pick a higher deductible, it’ll lower your commercial property insurance cost.
Check your policy if you’re unsure how much your current commercial property insurance deductible is.
How Can I Reduce My Risk Exposure?
There are ways you can reduce your company’s risk exposure. For example, you can create a plan to regularly examine and test your company’s alarm and sprinkler systems in your building or home office. Regular checks give you an opportunity to fix any issues and make sure you’re prepared if a disaster strikes.
What if I Don't Own My Business Property?
Commercial property insurance doesn’t just help protect owned property, but also leased or rented property too. Be sure to review your lease terms and obligations to find out what you’ll need for insurance coverage.
Is Commercial Property Insurance Required?
Commercial property insurance isn’t required by law, but it is considered essential to most small businesses. Some rental or lease agreements may require you to carry commercial property insurance coverage.
Customer Reviews
“Quick, efficient, patient, [empathized] with my situation, explained the process thoroughly, resolved the issue quickly.”
Syeda
“The rep was amazing, very helpful with all phases of my claim.”
Lea
“The Hartford quickly responded and paid for the equipment replacement as well as for the lost income our business suffer[ed].”
Patrick
“The Hartford is so efficient with handling the claim process.”
Larry
“The entire process was very simple, easy to understand and the pay-out of the claim was both fair and quick.”
Michael
“Very prompt, courteous and professional. Highly recommend The Hartford to anyone looking for insurance.”
Vinisha
Other Business Coverages
We offer insurance coverages for companies of all sizes – large and small.
Last Updated: March 14, 2024
*** Based on a 2023 study by Keynova.
2 Premium amounts presented are based on monthly premium paid by The Hartford's Small Business customers between 1/1/23 and 12/31/23 for 12-month policies. Premium is derived from a number of factors specific to your business and may vary.
Additional disclosures below.