WD Royal Insurance: Your Trusted Independent Insurance Agency For Business Property Insurance

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Commercial property insurance financially protects a business's physical assets from covered perils like fire, theft, wind damage, and vandalism. It can cover the building, its contents, and any outdoor fixtures, whether the business owns, rents, or leases the space.

Who needs commercial property insurance?

Most businesses can benefit from commercial property insurance, but it is especially important for companies with a physical location and assets to protect. This includes a wide range of industries such as: 

• Retail stores
• Restaurants
• Manufacturers and wholesalers
• Contractors
• Technology firms
• Service-based businesses, including salons and consultants 

For businesses that rent or lease their space, commercial property insurance can cover  their business personal property, and landlords often require tenants to have it. For home-based businesses, a standard homeowner's policy typically offers very limited coverage for business assets, making commercial property insurance necessary for greater protection.

What commercial property insurance covers

A standard policy typically covers the cost to repair or replace property damaged or destroyed by a covered event. A policy's specific coverage can vary, but generally includes: 

• The building: This protects the structure itself, including permanently installed fixtures and machinery, if the business owns it.
• Business personal property (BPP): This covers the building's contents, such as office equipment, furniture, inventory, supplies, and tools.
• Business income: This provides financial support for lost income and extra expenses if a covered event temporarily shuts down operations.
• Property of others: This covers items belonging to customers or others that are in your care.
• Outdoor fixtures: Coverage can extend to landscaping, fencing, and exterior signs.

What is generally not covered?

Standard commercial property policies typically do not cover all losses. Common exclusions often require specialized add-ons, or endorsements, for coverage: 

• Natural disasters: Events like earthquakes and floods are often excluded and require separate policies.
• Vehicle damage: Accidents involving business-owned or personal vehicles are not covered and require a commercial auto insurance policy.
• Employee injuries: Injuries to employees on the job are covered by workers' compensation insurance, not commercial property insurance.
• Negligence: Damages resulting from a business owner's negligence, such as deferred maintenance, are typically not covered. 

How to choose the right policy

To find the right commercial property insurance for your business, consider the following steps:

 To find the right commercial property insurance for your business, consider the following steps:

1. Inventory and assess risks: List all physical assets, including their value. Consider specific risks for your industry and location, such as susceptibility to floods or hurricanes.
2. Choose your coverage type: Decide between Actual Cash Value (ACV) and Replacement Cost (RC) coverage.
   • Actual Cash Value (ACV) pays the depreciated value of damaged property, which results in lower premiums.
   • Replacement Cost (RC) pays to replace the item with new property of comparable quality, which offers more comprehensive protection at a higher cost.

1. Explore policy options: For small to medium-sized businesses, a Business Owner's Policy (BOP) is a common and cost-effective option that bundles commercial property, general liability, and business income insurance. Larger or more specialized businesses can create a commercial package policy (CPP).
2. Evaluate limits and deductibles: Consider whether the policy limits are sufficient to cover potential damage. A higher deductible will lower your premium but increase your out-of-pocket costs during a claim.
3. Get professional advice: Consult an independent insurance agent to help assess your risks and compare quotes from multiple providers to find the best policy for your needs.