Business Property Insurance Basics
A lot of business owners wonder if they need business property insurance. Does it really make sense to carry insurance for your business on a regular basis? Should you just pay premiums every year, or should you go on a more frequent coverage plan? There is really no perfect answer to these questions, but there are some things you should know before you start thinking about business insurance.
A: There are many different types of business property insurance. It all depends on your location and the type of company that you run. Buildings coverage generally covers the physical structure of your company, while contents coverage helps to replace lost goods. Most clients opt for replacement cost coverage, which helps to replace the lost goods and pay for the repair to a damaged structure, rather than taking out new items. In the event of a natural disaster, this may also help to finance rebuilding, but it isn’t a good idea to depend solely on this protection.
Q: What is the difference between commercial auto insurance and my personal homeowner’s policy? A: If you have a separate policy, it may be harder for you to switch from one company to another. Many home owners’ policies cover their business as well, so there may be little need to change. However, when you take out business property insurance, you are usually getting coverage for the entire business, rather than just your home. You may need to look closely at your policy to see what kind of coverage you are actually getting.
Q: Is there a limit on the amount of coverage I can get for my business property insurance? A: Most policies offer a maximum coverage amount of $1 million per occurrence, but you should check with your agent to find out exactly what that amount covers. It’s important to know if there are limits on the physical assets you are protecting against damage and loss.
Q: Is it possible to receive help when filing a claim for a commercial property damage? A: Depending upon the nature of the accident, it can be quite easy to file a claim. For instance, if you were damaged by a car that was being driven recklessly, you may be able to receive financial help to repair or replace your vehicle. When you have a covered event like this, you may be unable to replace all of your damaged assets, but you should be able to receive some of them back. This kind of assistance can help protect your other personal property assets, such as jewelry and other collectibles.
Q: How can I protect my other assets from a lawsuit? A: Commercial business property insurance protects your personal and business assets from lawsuits related to covered events. It can help protect your clients and employees if you are sued. If you have a slip and fall incident, you can receive financial help to repair or replace your property, even if you haven’t been negligent. If your business causes a pollution, your company can be sued, not the people who live and work there. Commercial business property insurance protects your assets in these situations.
Q: How do I find the right commercial property insurance coverage? A: You can shop around among several different companies to see who offers the best policies at the right prices. Many companies also offer discounts for good grades, professional licensing status, and the type of job you do. There is no shortage of businesses providing business insurance coverage, so it should not be difficult to find a policy that suits your needs and your budget. Even though the cost of purchasing the coverage is higher than most homeowners’ insurance policies, it can protect your business, your home, and other assets that are needed for daily operation.
Q: Is there a grace period before the insurance kicks in and what types of operations are usually covered? A: Most insurance companies will offer coverage up to the date of cancellation. This means you may not need to cancel any accounts, but some operations such as rent collections and cash loans may need to be paid on or before the effective date of the coverage. Other types of operations that typically aren’t covered until the full year are: advertising leases, furniture leases, and equipment leases.