Commercial property insurance is an insurance policy purchased by a business that insures against damage to buildings they own and/or contents of buildings they own or lease. Damage must occur by a covered cause of loss which is determined by the specific insurance form. This policy may also cover loss of income and extra expenses that result from property damage.


What you need to know about commercial property insurance:

  • Most insured companies do not know all of the standard exclusions in the policy like flood and quake. An unendorsed property policy can also exclude ordinance and law provisions, utility services interruption, water damage including frozen pipes, theft and many more.

  • Most enhancements or sub-limits could actually be considered exclusions rather than policy enhancements. Pay attention to each one of them and increase any limit if the exposures are not adequate. Examples would be a $25,000 sub-limit for ordinance and law or $5,000 backup of sewers and drains coverage.

  • It is best practice to always separate BPP, EDP, TIB, BM, EB, & RP, & property of others.

  • Property is typically only covered only on scheduled locations. Transit should be purchased for property away from the primary premise.

  • Insurable interest is typically determined be a contract whether it be a lease or purchase contract. Make sure you understand exactly what you are required to insure by your contracts.

  • Make sure you insure to the correct value. Pay off in years of exposure vs. Premium paid is typically greater than 25 years.

  • The minute a building becomes vacant per the insurance company definition of vacancy, you automatically lose numerous important coverages. Always make sure your agent knows if you have a piece of property become vacant.