Whether you specialize in painting tiny dollhouse furniture, or something a little more conventional, keeping your doors open and the revenue a’flowing is at the top of your to-do list. But operations can go south in a hurry if you’re hit with a worst-case, or even a less-than-ideal, scenario.
Commercial property insurance is pretty important, especially if you don’t want your business to crumble from one tiny hiccup. Our independent insurance agents will walk you through your top options and help you find the right policy to keep your business upright.
What Is Commercial Property Insurance?
Commercial property insurance—also called buildings insurance—is there to reimburse you for the value of your business’s stuff, like buildings, equipment, inventory, and even customers’ personal property in case it’s lost or damaged due to a number of causes.
Is Commercial Property Insurance Mandatory?
It’s not legally required, but most lenders will want you to have it before they pass over the funds. Also, not having it means you’re responsible for replacing all your business’s stuff. So if you’re not a fan of sudden catastrophic debt, we recommend this insurance.
Why Do I Need Commercial Property Insurance?
Commercial property insurance is like the strait-laced, dependable partner in a buddy cop movie—it has your back, so you can continue with your usual shenanigans. With it, your business (and income stream) are protected. Without it, the bad things you could be on the hook for include:
Bankruptcy and closure: Rebuilding your business from scratch, or even just replacing part of it, can be expensive — sometimes even so expensive that it’s impossible without an insurance payout.
A ruined reputation: If your customer’s stuff gets destroyed and you can’t afford to replace it, you better believe they’ll tell all of their friends about it, who’ll tell their friends, and their friends until you don’t have any customers left.
Legal trouble: Defaulting on loans, being unable to pay vendors and employees, or failing to reimburse your customers can land you in some pretty hot water — and court.
Spoiled inventory: Even if your buildings and equipment are fine, a simple power outage can ruin perishable inventory like food and flowers and bring a business to its knees. (More on that below.) Insurance can cover that.
What Does Commercial Property Insurance Cover?
It covers the physical stuff that makes up your business, which means that coverage varies wildly depending on your business. Do you run a tasty little taco stand? Then your policy would probably cover the stand itself, the cash register, your employee uniforms, all your taco fixings…you get the picture.
Some policies reimburse you for what it will cost to replace these items if they’re destroyed, and some will reimburse you for their actual value instead — usually a lower amount, thanks to depreciation.
Depending on your location, these types of coverage are included in most policies:
Commercial property insurance offers a number of different options that need to be mixed and matched to fit your business. You can also add protection à la carte for coverage that is specific to your business.
Example: Spoilage coverage reimburses you for inventory ruined in power outages. It’s perfect for businesses that work with perishable materials, like florists and said taco truck.
How Much Does Commercial Property Insurance Cost?
Depending on the blend of coverage and a number of other factors like size and location, costs can vary from a few hundred bucks to millions of dollars per year.
So a giant sawdust-factory-slash-ice-cream-shop in Tornado Alley will be looking at the higher end, while an itty-bitty tricycle repair shop in a small town with low crime will be looking at the lower end.
The Benefits of an Independent Insurance Agent
Independent insurance agents are kind of like the Google of insurance quotes. You tell them what you’re looking for, and they bring in the results. And since they aren’t tied down to one carrier, they’re free to shop around and bring multiple policy options to the table.
And it gets better, you don’t have to review the policy options alone. They’ll walk you through everything you need to know about finding the right coverage, and price, for you. But it doesn’t end with your signature. Along the way, if something bad ever happens, they’ll handle the entire claim process for you and deal with the carrier, so you can focus on your dollhouse furniture painting empire. How sweet is that?