Commercial property insurance is insurance primarily targeted for commercial properties such as businesses, farms, and ranches. Commercial property insurance protects people who own such types of properties from damage to their buildings and contents.
Commercial property owners may include those who are business operators or those leasing a property to another entity. For protection, these people purchase commercial property insurance policies that protect the building and its associated structures. Property owners who let their houses or buildings may buy commercial property insurance policies that protect the building’s contents, such as machinery, furniture, and stored or displayed merchandise.
Types of Commercial Property Insurance Policies
There are different types of commercial property insurance policies. These types of commercial property insurance policies cover different kinds of risk factors for causes of loss and damage. These risk factors that are covered by commercial property insurance policies may include natural disasters.
Commercial property insurance policies generally fall into three categories. The first category of commercial property insurance policies is the basic form. Commercial property insurance policies of this kind cover common perils like damage caused by fire, lightning, windstorm, vehicles, aircraft, and civil commotion.
The second commercial property insurance policy category is the broad form. Broad form commercial property insurance policies include coverage for basic perils, plus others, such as water damage, collapse, glass breakage, weight of snow, ice or sleet, and sprinkler leakage.
The third is the special form commercial property insurance policy. This type of commercial insurance policy protects business owners from all causes of loss except those that are specifically excluded in the contract. These causes that can be covered by the special form commercial insurance policy include flood, earth movement, war, nuclear disaster, wear and tear, insects, and vermin.
Other additional coverage bought by consumers of commercial property insurance are liability policies, business interruption, and extra expense. The liability policy of commercial property insurance protects the business owner against the cost of a lawsuit and possible judgment. Coverage on business interruption can reimburse the commercial property insurance policyholder for income lost when his business is interrupted due to the loss or damage of a building. Extra expense in commercial property insurance covers payments made by the policyholder to resume business operations as quickly as possible after a loss.
Many commercial property insurance policies include coverage for flood. But despite this, most commercial property insurance policyholders get their insurance from the National Flood Insurance Program of the Federal Government. Some commercial property insurance policies do not cover losses from extreme glass damage or crime. If that’s the case, business owners generally buy this from other, more specialized commercial property insurance companies. A lot of companies are focusing their commercial property insurance policies to cover certain areas not covered by traditional policies.