Regardless of the type, scale, and nature of your business, it is always susceptible to risks. You can certainly not foresee or predict accidents and losses but can take measures to mitigate the impact of any such incident on your business. Most people report heavy losses incurred due to flood, storm, fire, or any other traumatic event. Risks that are associated with the environment cannot be averted, even if you have prior information about it. Sometimes, factors which seem trivial like power outage can also cause significant losses. The only way to deal with such situations is to be prepared for the losses. Although you cannot protect your business property from these events, the best way to be prepared is to compare commercial property insurance policies and invest in the best one to provide you cover during the crisis. Here is the basic information about the business/commercial property insurance plans that you must know before making a move to purchase one.
- Commercial property insurance
Commercial property insurance is also called commercial property and casualty insurance. The function of such plans is straightforward. As the name suggests, commercial property insurance provides you cover for any damage that is caused to your business building and its content. These plans protect against physical damage as well as income losses and higher business expenses. For instance, in case of a fire, you will get cover for the physical loss of the property and its content like furniture, equipment, etc., and for the losses, you would have incurred as the business closure for repair.
- What does it cover?
A business property insurance provides wide-range protection for any damage to the property and its belongings. It generally covers the following.
- Damage to the building or premise
- Damage to the furniture, fixtures, machinery, equipment, computers, inside the building
- Damage to the business inventory and important documents
- Damage to exterior fixtures including outdoor signs, fencing, etc
- Factors affecting the cost of commercial property insurance
The biggest concern while purchasing any kind of insurance is its cost. It is also an intriguing issue as it depends on several factors and is different from every niche of the market. Here are some prominent factors which govern the overall cost of business property insurance.
- Nature of business and value of property and assets
Some businesses like record-keeping can run in a smaller office area but have extremely valuable records while other businesses would need large areas for inventory storage or manufacturing units. The cost of property insurance is strongly influenced by the kind of business and value of assets and property.
- Construction
The material used in the construction of the building or its present condition including the plumbing, electrical system, etc can also potentially affect your insurance premium. For example, using fire-resistant material can reduce the cost of the premium.
- Location and neighborhood
The location and surrounding of the premises is also an important factor. It determines the probability and intensity of any threat to your property. A manufacturing unit in a crowded area would be at higher risks of power-related issues as it puts a tremendous load on an already loaded area supply. Such a unit would have a higher premium for property insurance.
- Protective measures
If you have installed appropriate protection measures like a smart security system, fire alarms, fire extinguishers or sprinkler systems, etc. you can get property insurance at a lower cost.