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What is Business/Commercial Property Insurance?

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A business needs to safeguard itself against any losses it might suffer which can cause any loss in the business. Commercial property insurance is a plan made specifically to cover a commercial or business property. This insurance policy is structured to cover any loss that might happen to a commercial property which can lead to financial damage caused due to natural disasters like earthquakes, volcanoes, tsunamis, etc. and also fire and theft. Property insurance for commercial property can be taken by manufacturing units, retailers, non-profit organisations, and businesses that offer services to customers.

What is Commercial Property Insurance?

When you are operating any kind of a business, the base and the most important part of it is the place from which you operate it. The place is where you have all your machinery, assets, computer, and other IT systems and of course, from where all work is done. The premises or the property is vital to a business and essential for its existence, development, and survival.

Any kind of disruption will have an impact on the daily functioning of the business and can cause losses as well. Any major or minor issue can affect the premises and may be the assets as well and will impact the deliverables. All this will ultimately affect the relationship with the customers and in the long run, affect the reputation of the business as well.

Recovering from such losses is easy and this tough time becomes a hassle for many. Like any personal emergency, such emergencies in businesses do not come announced and any number of precautions can never prepare a business for such losses. Getting back to the same level is tough and thus, in these tough times, support is needed.

A property insurance policy for commercial or business property is what comes in handy in such times. This property insurance policy thus safeguards a business against such losses which might occur due to unforeseen events like natural calamity, burglary, theft, fire, etc. Like most other insurance policies this gives a sense of security to the policyholder and of course, financial aid in times of a loss.

Advantages of Business Property Insurance

There are many benefits of having commercial property insurance for your business. Some of the main ones are as follows:

1. Financial Aid

When a business has property insurance for their business premises, they have a sense of security. But in times of a loss, the policy comes in handy and pays for the losses incurred. The stress and financial loss to handle the business in such times in itself is a big issue, and thus, the financial aid by the policy is one of the biggest benefits that it has.

2. Sense of Security

When you know at the back of your mind that the premises which are like the base of your business are insured against a financial loss caused due to a calamity, you have a high level of mental peace. This sense of security helps you focus better on your business and strategy to grow it to bigger heights.

3. Helps Recover Business

In case of an incident of fire or theft or any other calamity covered in the policy, the business for sure suffers as there is an interruption in the work. These losses are difficult to recover, but the loss that happens to the premises gets covered which enables the business to spring back faster and resume operations.

4. Comprehensive Policy

Buying a comprehensive policy is essential as this covers the property against unforeseen damage and loss. The main benefit of the policy is when you get adequate coverage and this one can only realise at the time of a loss.

Coverage of a Business Property Insurance Policy

The following are covered in a business or commercial property insurance policy:

● Fire

● Electrical breakdown

● Theft or Burglary

● Terrorist attacks, strikes, etc.

● Accidental damages

● Natural calamity

Exclusions of the Policy

The following perils are not covered in standard property insurance for a business or a commercial premise:

● Any damage or loss due to war is not covered

● Any items which are older than 10 years are not covered

● Collectable items are not covered

● Any consequential loss is not covered i.e. the loss does not happen directly due to a peril covered

● No insurance is given to the landlord if the property is given on rent

● Depreciation of the property and wear and tear

● Land cost

● No coverage is given for a building under construction

A standard policy will not have the coverage for the above. For some of the above, an add-on coverage can be opted for and for the same the insurance company can help at an added cost.

Claim under a Property Insurance Policy

As soon as there is a loss due to the perils covered under the policy the following steps must be followed to file a claim under the policy:

● Inform the insurance company

● Click photographs and take videos of the property and the damage

● Have all documents ready about the insurance policy, premises, inventory and asset lists, etc.

● Help the surveyor appointed with all information at the time of the survey

● Once all the information is collected and the surveyor is satisfied, he will make a report and send it to the insurance company which will have the amount of payable loss

The property insurance policy for the business premises or commercial property is very important. As stated earlier, the building or place where the business operates is the base and the most important part as this is where all your assets are and this is where the work happens and the business grows.

Any damage or loss to this place is a direct loss of the business and thus, safeguarding against this is important. When you start a business, a lot is at stake and such losses and damages are the last things you want to stress you and cause losses.

It is always advisable to have property insurance for your business or commercial property so that any losses due to natural calamity or fire or theft are covered. The cost to rebuild the premises and get them back running is important and the cost for the same is covered under the policy.

Thus, if you have a business, it is important to have property insurance for the business or commercial property. While buying, make sure you buy it from a good insurance company, get adequate coverage and of course, check inclusions and exclusions so that there is no problem at the time of a claim. And also, take care that it is renewed timely to ensure there is no point where there is no coverage for the business property.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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