What Does Business Property Insurance Cover?

(Essentially, the buildings and the stuff inside them. But let's talk a bit more about it.)
Written by Ashley Surinak
Written by Ashley Surinak

Insurance doesn’t have to be boring. That’s why we hired Ashley Surinak to be our BA insurance writer. Ashley specializes in making mundane subjects hella-entertaining.

paul martin Reviewed by Paul Martin
paul martin
Reviewed by Paul Martin

Paul Martin is the Director of Education and Development for Myron Steves, one of the largest, most respected insurance wholesalers in the southern U.S.

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What does business property insurance cover?
What does it protect in terms of my building?
What does it protect inside my building?
Do I need business property insurance?
Expert(s) Found on this Page

What does business property insurance cover?

When I hear the term “property insurance,” I assume that it means my property is covered. However, my business owns more than one type of property. Does this mean that the building itself is covered, or is the property inside covered too? I want to be sure so I know which additional policies I might need to keep my entire business protected.

Business property insurance is a bit more straightforward than the other business insurance topics we’re talking about in the Q&A series. However, that doesn’t make it any less important. Business property insurance is actually one of the more important types of coverage because it covers a lot of what your business owns.

When you purchase business property insurance, you’re purchasing insurance for your buildings and the stuff inside. The easiest way to think about this is that it’s the pseudoequivalent of homeowners insurance, but for your business. 

This means that if there is any sort of covered loss such as a fire, the damage to the building itself as well as movable property in the building will be covered. Sometimes certain property is excluded unless you pay for additional coverage at the time you buy your policy. You should be sure that everything you want covered is covered when you buy your policy for this reason. 

If you’re unsure whether something is covered, talk to your TrustedChoice.com independent insurance agent. Doing so will give you peace of mind that what you think is covered is actually covered and what isn’t covered can be, if that’s what you want.

What does it protect in terms of my building?

I understand that property insurance covers my building. Does this only mean that the structure itself is covered? Or does “building” mean more than just the four walls and roof? 

This is a great question! Insurance policies are incredibly specific about what’s covered and what’s not covered, so you should be specific when you’re purchasing policies, too.

Generally, property insurance covers the building, i.e., the walls and roof. This is true whether you rent or own the building. However, it isn’t limited to just the structure of the building. Property insurance, by way of the building itself, also covers:

  • Permanent fixtures
  • Permanent machinery
  • Permanent equipment 

Always keep in mind that policies could limit coverage based on the cause of loss. This means that damage due to a fire may be covered but vandalism isn’t. Or maybe wind is covered but explosions aren’t. Think about which perils you want covered to ensure you aren’t left without coverage when an accident occurs to the building, or a permanent fixture, or piece of equipment inside. 

If you’re unsure what you want or need covered, ask your TrustedChoice.com independent insurance agent.

What does it protect inside of my building?

Just like property insurance protects your building and the property inside that is permanently attached to it, it also protects movable property. By movable, I’m talking about things like tables, chairs, dishes, merchandise, and more, depending on what kind of business you’re running.

The same policy exclusions will apply to movable personal property. That being said, the same kinds of considerations that I discussed above are relevant when you’re trying to decide whether you need additional coverage for what’s inside of your building. 

Do I need property insurance?

Now that I understand what property insurance is, my question is simple. Do I need to purchase property insurance? And if so, how much will it cost?

If you own or lease commercial property, you need to purchase property insurance. This is one insurance area that is fairly plain and simple, no questions asked. 

That being said, costs will differ based on factors like:

  • What your building is made of
  • Your building’s age
  • What kind of business you conduct on the premises
  • Exposure to potential hazards
  • Safety features (sprinklers, alarms, etc.)
  • Location (weather threats, etc.)

If you want to learn more about how all of these factors work together, talk to your TrustedChoice.com independent agent. Armed with all of the relevant details, he or she can provide you with everything you need to know about how much coverage you need and how much it’s going to cost.

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