Understanding Commercial Building Insurance
October 5th, 2009 by Jamery ClarcksonYou’ve finally grabbed the opportunity. You have some extra cash and the rental property down the street was up for a bargain and you bought it. Now you’ve poured some money in to restoring the property to liveable conditions. Before you get ready to cut the ribbon and accept your first tenants, you’ve got one more thing to consider – commercial building insurance.
Like your life insurance policy, you’d want to minimize your risk of loss in case unforeseen events send your precious property in flames or leaves it devastated it can no longer be useful. What you may also want to protect yourself from, but have not given much thought to, is being held liable for personal injury or deaths that happen on your premises. It might be useful to be a bit more familiar with commercial building insurance before you decide which type and how much coverage is best for your rental property.
Firstly, there are commercial building insurance policies that cover building structure only. Others may include coverage for any properties within the building such as inventories, equipment, machines, etc. Still others may further include injuries or deaths occurring within the premises. This extent of coverage is one consideration if you’re the property owner considering commercial building insurance.
Secondly, would you choose named peril or all risk? These types of policies tell you when you’re qualified to file for claims. With a named peril policy, the hazards against which you seek to insure your property from must be stated in the contract. That means you may specifically be insured against flood but not against fire or explosions. If you want to be protected against all three, you have to clearly state that in your contract. On the other hand, the all risk policy protects your property from all types of hazards except those that are specifically mentioned in the contract. With an all risk policy, if fire is mentioned in the contract, then you’re not insured against damages caused by fire.
Thirdly, commercial building insurance makes your office spaces more marketable. Owning a commercial building is more than just being the landlord. The businesses who lease space in your building expect you to provide a safe environment. The tenants you take in bring various kinds and levels of risk. It makes logical sense to at least want to have some protection against these. A coffee shop’s blender can run on a short circuit and start a fire. The roomful of papers an accountant keeps can cause fire to spread rapidly. A beauty salon’s array of hairsprays may be flammable and worsen the flames. Business owners would feel more secure locating with you if your property has commercial building insurance.
Depending on what type of businesses you’re aiming to house in your building, there’s always a commercial building insurance that’s suitable for your needs. Don’t rush the decision but don’t think it’s unimportant either. Shop around for commercial building insurance. Your property manager can recommend some but a stack of quotes from different providers is a good place to begin. Check for commercial building insurance quotes online to get you started.