Commercial property insurance is a critical risk management component for any business with physical assets. Here’s a look at how the policy works and how it can protect your business.
Commercial property insurance covers the assets your business owns against perils like fire, theft, and natural calamities. You’ll probably need this policy for financial protection if you operate in industries such as retail, manufacturing, and services. Insurers usually offer this type of property coverage together with other policies like commercial general liability insurance.
How Does Commercial Property Insurance Work?
Commercial property insurance and property insurance for individuals work pretty much the same way. However, you may legally deduct your commercial property insurance costs as expenses for tax purposes. This policy doesn’t cover damage caused by tenants living in the insured property.
When assessing your commercial property’s coverage needs, there are important considerations to keep in mind. For instance, the value of your business assets, including the building and any business equipment inside it, influences the cost of coverage. Therefore, a thorough audit of all tangible assets to be covered is necessary to determine their total replacement value and the amount of insurance you should purchase to get maximum protection.
Commercial property insurance costs for manufacturers or big corporations like railroad businesses are generally high. That’s because these companies need to protect assets worth millions or billions of dollars. Buildings located in areas prone to natural disasters and severe weather are usually more expensive to cover against potential hazards.
How Fire Protection Impacts Commercial Property Insurance Rates
In addition to the replacement value of covered assets, here’s how fire ratings affect your commercial property insurance premiums:
Your insurance rate will be lower if your business building is in a city or town with proper fire protection.
Regarding the design and construction of your business building, here are some vital considerations:
- Constructing your premises using fireproof materials instead of flammable options can lower your insurance costs.
- Modifying an existing building can dent a fire rating. So make sure to discuss any intended structural changes with your insurance agent beforehand to avoid unnecessary premium hikes.
- Remodeling a building’s interior can also downgrade a fire rating. As such, you may want to avoid introducing wooden structures like partitions or floors in a building with a good fire rating. Such materials can accelerate the spread of fire in a building, and their presence may nullify an existing insurance premium discount.
- You can boost a fire rating by incorporating fireproof interior walls, doors, staircases, etc.
A building’s occupancy affects its fire rating in ways such as:
- Generally, fire is more likely to start in a restaurant or auto repair shop than in a lawyer’s office.
- A poor fire rating for one tenant will impact the rating for the entire building.
A building with quick access to a fire hydrant and fire emergency services may qualify for an insurance discount.
Overall, reducing the risk of fire in a business building and installing a security system to prevent theft can lower commercial property insurance costs.
Business Assets That You Can Protect with Commercial Property Insurance in Sarasota
- Your rented or owned business building
- Owned or leased office equipment like computers and furniture
- Critical business documents, including accounting files
- Factory equipment
- Landscaping and fencing
- Business signage
- Communication equipment like satellite dishes
To protect your business assets against common perils, consider getting commercial property insurance in Sarasota County, FL. The team at Atlas Insurance can help you obtain proper coverage based on your unique risk exposures. Contact us today to learn more!