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Whether you operate your small business out of your home, or you rent, lease or own a commercial space — you need commercial property insurance. Commercial property insurance doesn’t only protect the building you use, but a long list of things inside including equipment, inventory, furniture, computers and other electronics. It can also provide protection for things outside of the building including outdoor signs, fencing and landscaping such as gardens, trees and shrubs.
When you’ve suffered a loss to your property, the right commercial property policy can help with the repair cost and get you back in business quick.
Recovery process following a loss: Suffering a loss to your small business can be a traumatic experience, and the longer it takes to get back on your feet, the worse the experience can become. If damage is done to your property as a result of an insured peril, the right policy can help get you back up and running quickly, which can help mitigate the long-term effects of the loss. By limiting your business’ downtime, you also maintain your business’ continuity and protect your reputation with your customers.
Repair costs: If your business suffers a covered loss, your commercial property insurance policy can help with the repair costs to get you back in business quickly. For example, if you own a commercial space, and someone vandalizes the door to your business preventing customers from entering the building, the right small business insurance policy will help get the repairs done quickly and help keep the costs to your business down.
Replacement costs: If the covered loss to your property is too extensive for repairs, commercial property insurance can often help with the replacement costs. For example, if you own a bakery and a fire breaks out in your kitchen destroying your electrical oven, your commercial property insurance policy can help keep the replacement costs low and protect your bottom line.
Business interruption coverage: If you suffer a covered loss, you likely won’t be able to sustain operations right away. The right commercial property insurance policy may be able to mitigate your loss of income to help you keep up with bills, payroll and other expenses until you’re back on your feet.
Unexpected losses: No matter how much you prepare your small business for the risks it faces, sometimes unexpected disasters happen. Natural disasters are often out of our control and can cause significant property damage. Instances of fire, winter storm damage, hail and some forms of water damage may be covered in your commercial property policy to help you keep costs down in these unforeseen situations.
Insurance companies will consider a variety of factors when creating your commercial property policy and determining the premium you’ll pay for your small business. Some of these factors include:
- Location: Where your business operates will have a big impact on the type of coverage you need and how much it can cost. For example, if you work in an area with a high prevalence of forest fires, your coverage and premium will need to reflect that.
- Replacement costs: The amount of money it would cost to replace both your commercial space and its contents will help determine how much coverage you need and how much your premium will cost.
- The age of your property: As a building gets older, its likelihood of suffering a loss increases. Newer buildings will typically have lower insurance premiums than older ones. If you operate your small business out of an older building and decide to do renovations or enhancements to your property, it’s important to inform your insurer as this may affect your coverage and premium.
- Electrical work and plumbing: Water damage is one of the leading causes of insurance claims in Canada. The type of plumbing in your building will be a key factor in determining your coverage needs and the cost of your premium.
The factors that determine your commercial property insurance premiums can also be factors to help you lower them. There are several things you can do as a small business owner that may help lower your property insurance premiums, such as replacing the roof, improving your building security and upgrading your electrical system.
Other coverage options to consider:
Commercial general liability insurance: Commercial general liability (CGL) insurance is designed to protect you and your business from a loss if you’re found legally liable for bodily injuries or property damage to a third party caused by the product you sell or the service you provide. CGL insurance can also offer protection in situations where you or your employees are conducting business offsite.
Product liability insurance: Product liability insurance is often included in a CGL policy, but not always. It’s important to double check that your small business insurance policy does protect you from risks associated with product liability claims.
Cyber risk and data breach coverage: Cyber attacks are an ongoing threat to small businesses and have continued to rise recently. Cyber event expense coverage is designed to help small businesses that rely on technology mitigate some of the expenses that may incur as a result of a cyber hack.
Errors and omissions (E&O) insurance: If one of your clients or customers claims your advice caused them a financial loss, your errors and omissions coverage can help you recover from the financial consequences that may incur.
Equipment breakdown insurance: Your equipment is covered in your property insurance policy for damage caused by external sources, such as fire, floods and weather damage; however, you may not be covered for electrical or mechanical damage. In these situations, you’d look to your equipment breakdown insurance.
Commercial auto insurance: If you or your employees use your vehicle for business purposes you need commercial auto insurance to protect that vehicle in ways your personal auto policy may not be able to.