Understanding your business insurance coverage can be daunting, but take comfort in the fact that you are not the only one with questions. Business Property insurance (also known as Commercial Property insurance) provides coverage for your business and its contents or physical assets. It can also help to cover your repair or replacement costs if your business property is damaged or destroyed as a result of a covered loss. Here are the answers to some commonly asked questions about business property insurance.

Why is Business Property insurance important?

It protects your physical location against perils listed on your policy, such as your physical space, assets, equipment and inventory. In short, it helps to safeguard your organizations existence.

How much does this insurance typically cost?  

It is challenging to estimate the costs without first exploring your insurance options. Average costs can vary and no two properties are the same. The business type, size, location, equipment and more, are all part of premium calculations.

An average business in Canada pays $83 to $250 per month for a commercial property coverage limit of $1 million. The coverage limit can be increased, depending on the needs of the business.

Is theft covered under my Commercial Property insurance policy?

Yes, theft coverage is part of your plan. The amount and type of plan and limits will vary, given the type of business you run and the provider that you use. Employee theft is typically not covered – only theft from third parties is included.

Theft that occurs as a result of employee involvement is not covered under Business Property insurance? Coverage for employee theft would fall under your Crime Insurance coverage policy for businesses.

Do I need this type of insurance if my property is vacant?

If you have an unoccupied property, you should insure it with a vacant property plan. Speak with your isure representative about requirements.

What is the difference between Business and Residential insurance?

While business owners and home owners face many of the same property risks, the financial risk of a peril damaging the property is very different.  Businesses will have different financial limits for liabilities, taxation and other legal requirements to consider. Replacing your clothes destroyed in a fire would be costly, however it does not compare to losing a store’s worth of inventory in a blaze. No matter what type of business owner you are, it’s a good idea to have your isure broker research what type of commercial insurance you need in order to cover potential perils and threats to your business.

Who pays Building insurance for commercial property?

Building insurance on a commercial property is arranged by the property owner. This could be the landlord or an owner-occupier. In the case of a rented property, the landlord might pass off the premiums to the tenant to pay as part of the rental contract.

What is the difference between Business Liability insurance and Commercial Property insurance?

Commercial property insurance protects your business’s physical assets, including its building, furniture, equipment and inventory from damages caused by:

  • Fire
  • Hail
  • Lightning
  • Windstorms
  • Vandalism
  • Theft
  • Explosions

Business liability insurance helps you address the responsibilities you have to the people who come in contact with your business and its operations. If your company operations cause the damage, you can be liable for it. These people include:

  • Customers
  • Partners
  • Suppliers
  • Vendors
  • Employees

My business is brand new…do I need this type of insurance right away?  

Absolutely. Think of it this way: If you could suffer a loss, then you need insurance. It doesn’t matter if you’re on day one of business or day 1000…you need insurance, period.

If I work from home, do I still need Commercial Property insurance?

Yes. In most cases, you’ll only be insured and reimbursed for up to $2,500 of damage or loss to business assets that occur within a homeowner’s insurance policy. It is best to purchase additional insurance and protection under your home coverage or add on a commercial property insurance policy to cover anything over the $2,500 amount.

I am concerned about being wrongfully sued in relation to my business. Will this type of insurance cover me?

No. If you are concerned about litigation, you should consider adding a Professional Liability endorsement to your policy. Also known as Errors and Omissions Insurance, this coverage can protect you in the event of damages from your acts, errors or omissions in providing professional services. Professional Liability can cover legal fees, settlement agreements and loss of wages due to the lawsuit process.

I have moved my accounting business to my home office. Will I save on my Business insurance premiums?

When it comes to determining the premium you’ll pay for your business, a variety of factors are taken into consideration. Location, replacement costs, theft/security systems, business type and claims history all contribute to how your premiums are calculated. As your overhead is lower and your risk exposure has changed, it is likely that making your business a home-based operation will see changes in your rates.

If you have moved your business to a home office, you may want to look at additional coverage to protect against cyber attacks. Cyber insurance can help keep your business secure and private. For any other Business Property insurance-related questions, contact your isure broker today.

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