What is Commercial Property Insurance?

Many Massachusetts businesses own physical property, and their property often accounts for a sizeable portion of their assets. Commercial property insurance policies help businesses protect their property and the investments they’ve made in that property from covered risks.

Commercial property insurance may be likened to homeowners insurance, except it’s designed to help protect commercial buildings rather than residential homes. Commercial property policies are adjusted for the increased risks that commercial buildings are exposed to and provide the higher levels of coverage the buildings often need.

What Massachusetts Businesses Need Business Property Insurance?

There are many Massachusetts businesses that can benefit from having business property insurance.

Businesses that have commercial buildings almost certainly should consider getting this coverage. In some cases, businesses that have loans on commercial buildings that they own may even be required to carry a business property policy. Lenders frequently include a requirement to insure any building that’s purchased with a loan so that the lender’s financial investment in the building is protected.

Businesses that don’t own commercial buildings may not need as many business property protections as those that do own buildings. A business property policy may still have coverages that are beneficial to businesses that don’t have buildings or land. For, these businesses frequently still have equipment and supplies, which is a form of physical property.

What Coverages Do Business Property Policies Provide?

Business property policies generally provide two primary coverages:

• Buildings Coverage, which may extend coverage to one or more commercial buildings
• Contents Coverage, which may extend coverage to equipment, supplies, products and other items that a business has

In addition to these coverages, it’s frequently possible to add some other specific coverages. For example, many business property policies can be supplemented with flood coverage and earthquake coverage, both of which offer peril-specific protections for property.

(As is true with any insurance policy, the exact protections that any particular business property policy provides are determined by the policy’s terms and conditions. Policies’ exact coverages can vary, and they often do because businesses have a range of property insurance needs.)

Does Business Property Insurance Include Liability Coverage?

Business property insurance normally doesn’t include liability coverages. Because businesses have such diverse liability coverage needs, liability protection is usually procured through liability-specific policies (.e.g general liability insurance, product liability insurance, etc.).

How Are Open- and Closed-Peril Business Property Policies Different?

The vast majority of business property policies can be categorized as either open- or closed-peril policies. Open-peril policies typically provide coverage against any peril that’s not specifically excluded within the policy’s paperwork, while closed-peril policies normally only cover perils that are specifically listed within their terms and conditions. In most cases, open-peril policies offer broader coverage than closed-peril ones.

How Are Business Property Policies’ Premiums Calculated?

Insurance companies take into account many factors when they calculate business property policies’ premiums. Some of the items they may consider include the:

• Location of a business’ property
• Size of a business’ building and property
• Work that’s carried out in a business’ building
• Security features installed on a business’ building
• Coverages and limits selected by a business

How Can Massachusetts Businesses Get Commercial Property Insurance?

To get help finding insurance for a commercial building, business owners in Massachusetts should talk with an independent insurance agent who specializes in commercial property insurance at Flavin and Flavin Insurance. An agent who’s familiar with the protections that commercial property policies offer will be able to recommend coverages based on a business’ particular risk exposure. Being independent, they’ll have the freedom to recommend the best available coverage options regardless of what insurer offers them.