All types of commercial insurance plans are part of a greater risk management strategy that each business should have in place. At the end of the day, it boils down to the business owners and leaders and what key risks they are able to identify.
If you ever find yourself making such a decision (in particular, a decision relating to whether you need commercial property insurance or not), we’re here to help. As an award-winning insurance brokerage, we at KASE Insurance are passionate about sharing our knowledge about insurance to business owners and leaders like yourself.
In this article we cover some common examples of commercial insurance claims relating to property used for the workplace. This is a good reference for anyone who wants a more solid grasp of what benefits this insurance type offers. Along the way, we will also cover the fundamentals such as what commercial property insurance is and what it covers.
Let’s get started!
What is Commercial Property Insurance?
Commercial property insurance is a type of insurance that protects your business from financial loss (including income loss) in the event that your commercial property is damaged or becomes inaccessible. Furthermore, this type of insurance covers the equipment, documents, products, and raw materials within the commercial property if they are damaged by external forces or if they are stolen.
Commercial property insurance is a must-have for virtually all kinds of businesses that have an office, workplace, headquarters, storage space, or brick-and-mortar store. This insurance type can be for both owned and leased commercial space.
What Does Commercial Property Insurance Cover?
Commercial property insurance provides coverage for the following:
- Repair/replacement costs needed for the commercial property following covered causes of damage.
- The total cost of lost or damaged inventory, equipment, documents, and employees’ personal belongings within the premises due to covered causes.
- Lost income if the workplace becomes inoperable or inaccessible due to covered causes.
In the above items, we used “covered causes” for all points because all commercial property insurance policies have a predefined set of causes that are covered; these typically include the following:
- Natural calamities, such as hurricanes, earthquakes, or floods
In line with this, however, it is important to know that not all commercial property insurance policies are the same. If you need more perils or causes to be covered, an expert insurance brokerage like KASE Insurance will be able to help you negotiate these while still ensuring that you have the most cost-effective premium possible.
Commercial Insurance Claims: Property-Related Examples
Case #1 – Fire
Problem: Faulty electrical wiring causes a fire to break out in your store. It took a while to be put out, leaving products, equipment, and furniture destroyed in its wake. The total losses amounted to $25,000 before the fire was put out. The repairs on the property itself would cost around $10,000 and restoring the store to operational status would take a full two weeks.
Resolution: Commercial property insurance will cover for the total repair and replacement costs associated with property damage in this scenario that totals to $35,000. On top of this, you will be compensated for lost income during the two weeks of restoring the commercial property.
Case #2 – Theft
Problem: Your office space was burglarized. Valuable office equipment was stolen from the premises overnight and an investigation is still under way. The total losses amount to $8,500. Furthermore, replacing the equipment and setting up once again will take around four days.
Resolution: Your commercial property insurance will cover the cost of the lost equipment ($8,500) as well as the total lost income during the period of business interruption.
Case #3 – Landslide
Problem: A landslide happens on the public road leading to your restaurant, making it inaccessible until the debris and fallen trees are cleared away. The whole process will take three days.
Resolution: Though your commercial property was not damaged, because a covered external force caused your business to be inaccessible and thus shut down for three days, commercial property insurance will cover the lost income during this time.
Case #4 – Earthquake
Problem: An earthquake hits your area, causing damage to your office. Ceiling panels and fixtures fell from above, which resulted in some equipment below being damaged beyond repair. The building has also suffered minor structural damages.
Additionally, the dust and debris in the office would need to be cleaned up before operations can resume, resulting in the restaurant being closed for two weeks. The total cost amounts to $40,000.
Resolution: Commercial property insurance will cover the cost of $40,000 in repairs, replacements, and restorations needed for the building and the equipment therein. The lost income will be reimbursed as well for the duration of two weeks.
Case #5 – Flood
Problem: Your business’s storage space is in an area that was swept by a massive flood with more than 12 inches of water. Though your business had backup inventory, some of the products and materials in your affected storage space have suffered water damage, costing you a total of $20,000. Furthermore, the property itself suffered mild water damage and would need some repairs and extensive cleanup before it can be used again. This totals to $19,000.
Resolution: Even in the absence of business interruption, commercial property insurance has your inventory covered, along with the cost for repairs and restoration in a case like this. You will be able to claim the total of $39,000 that your business would’ve otherwise lost to flood-related surprise expenses.
Protect Your Business Today With Customized Commercial Property Insurance
After seeing the wide extent of commercial insurance claims examples, you may be looking forward to securing this type of property insurance for your business. As business landscapes become more competitive, having managed risks regarding your commercial property and its contents is definitely an added edge.
Just as important as the type of insurance you choose is the insurance brokerage that you work with. At KASE Insurance, we guarantee nothing but the highest quality of service, sound recommendations regarding business insurance, personalized insurance plans, and more.
We will help you through it all from setting up the insurance plan, to negotiating the premium costs, to filing/following up with commercial insurance claims for your property.
Ready to bring your business to a more secure future? Contact KASE Insurance now!