What is considered “Commercial Property”?
Do you own or lease an office or commercial space? Do you use equipment such as computers, machines or hardware at your business? Do you work remotely and use portable equipment for business purposes? A commercial property policy is necessary if any of these questions apply to you.
If your business is not remote, you will most likely need to rent or purchase a workspace. Whether you need the space for manufacturing, warehousing or simply working in an office, that type of property is considered commercial property.
What is the difference between residential property and commercial property?
Commercial property can often be classified as commercial real estate, investment property or income property. The difference between commercial and residential property is that commercial buildings are meant to generate a profit from capital gains or rental income.
Examples of residential buildings include duplexes, mobile homes and condominiums. Meanwhile, types of commercial properties include offices, retail, industrial, leisure and healthcare facilities.
Let’s say you run an online floral business and decide it’s time to open up a brick-and-mortar location. You find the perfect space to lease at your local shopping centre. The space you are renting for your flower retail store is considered commercial property.
Other examples of commercial property include hotels, pubs, restaurants, cafes, sporting facilities, medical centres, hospitals and nursing homes.
Every commercial property comes with potential risks including fire vandalism or theft. This is where your commercial property insurance will come in handy.
Read more: Property Crime Coverage for Businesses and Tips for Preventing Crime
Commercial Property Insurance
If you are wondering “What type of insurance do I need for my commercial building?”, a good place to start is with a commercial property insurance policy. Commercial property insurance provides coverage for physical loss or damage to your property and its contents caused by fire, windstorm, hail, theft, vandalism and other perils. This policy can also be classified as commercial building and commercial rental insurance.
For example, your custom neon sign that hangs in your store window has been stolen – commercial property insurance can cover that. A fire occurs in your office building, destroying your office furniture – commercial property insurance covers the cost to replace the damaged contents.
What does a commercial property policy cover?
Your commercial property insurance policy will vary depending on your business type, location and condition of your property.
The typical commercial property insurance policy can cover the following:
- Equipment
- Tools and equipment used off-site for business purposes
- Fencing and landscaping
- Lighting systems
- Furniture and fixtures
- Supplies
- Windows
- Personal and customer property
- Windows and outdoor signs
- Computers
- Electronics
Depending on the type of business you own, you may have more of the above items such as tools or computers than what is typically covered under a Commercial Property policy. Adding on an endorsement can give you additional coverage to meet the unique needs of your business.
Commercial property insurance can additionally replace or repair business items such as merchandise, inventory, furnishings, equipment, electronics, food and fixtures if they are damaged in an unforeseen event. If your commercial space needs improvements to its non-structural elements such as the carpet, lighting and paint, commercial property insurance can cover the cost of these leasehold improvements.
Additionally, we suggest you look into adding Business Interruption Insurance to your property policy to cover the costs associated with having to close your business due to a Commercial Property claim.
Read more: Business Interruption and Why it’s Important
Who Needs Commercial Property Insurance?
- Electricians
- Construction companies
- Landscapers
- Carpenters
- Contractors
- Auto shops
- Welders
- Bakeries
- Clothing stores
- Restaurants
- Florists
- Book stores
- Graphic designers
- Copywriters
- Financial advisors
- Accountants
- Anyone else who uses a property for business purposes
Need Additional Coverage?
You may need additional coverage to protect your property and business assets. Here are a few common insurance policies you may want to consider adding to your insurance package:
Commercial General Liability (CGL) is essential coverage that protects you from everyday risks in your business such as a customer slipping and falling over equipment resulting in an injury. CGL covers claims of third-party property damage, bodily harm or advertising injury that occur on or around your business premises.
Tools and equipment can be at risk of being stolen or damaged. This policy will provide coverage for the repair or replacement cost if your tools are damaged, lost or stolen. To ensure you have enough coverage, you will need to make an inventory list of what tools and equipment your business owns.
When you are transporting materials to and from job sites, there is room for accidents to happen, which can damage your equipment and slow down your projects. If you are using a vehicle to drive to work, your warehouse or anywhere in between, Commercial Auto Insurance may help cover you for accidents that happen while travelling on the job.
You need Pollution Liability Insurance if you work in an industry that exposes you to specific environmental risks and liabilities corresponding with pollution. This policy is designed to protect businesses from third-party bodily injury, environmental and property damage and the event of pollution on a covered job site.
Installation Floater covers moveable and personal property installed or changed by a contractor. This policy covers property in the course of being installed, including labour, so you’re protected if there is a loss part-way through the job. As a business owner, you can obtain a blanket policy for all work performed with limits set on average and/or maximum installation exposures.
Cyber Security Insurance is often overlooked but it is important to understand the risks of cyber attacks and threats to small and medium enterprises. Cyber security insurance will provide coverage for businesses that rely on technology to minimize the risks associated with cyber-attacks.
Read more: Protect Your Business from Cyber Risk: Awareness, Education and Training Tips
The brokers at Fuse Insurance will work with your business to provide comprehensive options for commercial property insurance along with any other policies you may need in order for your business to be fully protected. Our online quote application is quick and easy and provides the information we need to get your insurance policy in your hands as soon as possible. To start your quote now, fill out our form online or call 1-866-387-FUSE (3873).