Commercial property insurance covers the physical assets a business owns or leases and pays to repair or replace them after a covered loss. Commercial property insurance covers buildings, equipment, inventory, furniture and other business property, but a general liability policy doesn't cover damage to your own assets, so businesses that own or lease physical space need a separate commercial property policy.
A standard commercial property policy typically includes five coverage types:
- Building coverage pays to repair or rebuild the physical structure of an owned or leased building after a covered loss such as fire, windstorm or vandalism. The policy covers the structure itself, not the land it sits on.
- Business personal property coverage covers the contents inside the building, including equipment, inventory, furniture and fixtures the business owns. Property belonging to others, such as customer items left for repair, may require a separate bailee's coverage endorsement.
- Business interruption insurance replaces lost income and covers ongoing operating expenses, including rent, payroll and utilities, when a covered loss forces the business to slow down or close temporarily. Coverage typically begins after a waiting period and ends when the business is reasonably restored.
- Equipment breakdown coverage pays to repair or replace mechanical and electrical equipment that fails due to internal breakdown, such as HVAC systems, boilers, refrigeration units and computers. Standard commercial property policies exclude mechanical breakdown, so this coverage is typically added as an endorsement.
- Inland marine insurance covers business property in transit or at locations away from the primary business address, such as tools and equipment transported to job sites. Standard commercial property policies typically cover property only at the listed address.
