Commercial Property Insurance
Coverage for business buildings, equipment, and inventory.
Typical cost: $500 – $5,000+ per year
What Is Commercial Property Insurance?
Commercial property insurance covers business-owned buildings, equipment, inventory, furniture, and other property against losses from fire, theft, vandalism, storms, and other covered perils. It's a fundamental coverage for any business with physical assets.
Replacement Cost vs. Actual Cash Value
Replacement cost coverage pays to replace damaged property with new items of similar quality. Actual cash value deducts depreciation. While replacement cost costs more, it ensures you can fully rebuild without paying out of pocket for depreciation.
Business Personal Property
Business personal property (BPP) includes everything inside your building: furniture, computers, equipment, inventory, and supplies. Make sure your policy covers enough BPP—underinsurance is common and leaves businesses unable to fully recover from losses.
What's covered
Building Coverage
Covers the physical structure including walls, roof, built-in fixtures, and permanently attached equipment.
Business Personal Property
Covers equipment, furniture, inventory, computers, and other contents.
Business Interruption
Replaces lost income and covers extra expenses while property is being repaired.
Equipment Breakdown
Covers mechanical and electrical failures of business equipment.
Debris Removal
Pays costs to clean up and remove debris after a covered loss.
Ordinance Coverage
Covers costs to bring rebuilt property up to current building codes.
Pros and cons
Advantages
- Protects your largest business investments
- Replacement cost ensures full recovery after losses
- Business interruption maintains cash flow during rebuilding
- Often bundled in a BOP for small business savings
- Covers both owned and leased improvements
- Equipment breakdown fills warranty gaps
Considerations
- Flood and earthquake typically require separate policies
- Named perils policies have gaps—open perils is better
- Underinsurance leads to coinsurance penalties
- Property values must be updated regularly
- Some high-value items need scheduled coverage
Frequently asked questions
Related coverage
Bundled coverage combining general liability and commercial property insurance.
Core business protection against third-party bodily injury and property damage claims.
Errors & omissions coverage for professionals providing advice or services.
Coverage for businesses that manufacture, distribute, or sell products.
Required coverage for employee work-related injuries and illnesses.
Vehicle coverage for business-owned cars, trucks, and fleets.
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