Commercial Property Insurance helps protect your business assets such as computers, furniture and inventory. The insurance pays for repairs and/or replacement of your assets so that your business can continue to operate at full speed. Without this coverage, most startups and small businesses would be challenged to replace any expensive equipment critical to the operations.
Some policies also include “business interruption” coverage, which helps protect you against the loss of income in the event of a claim.
Who Needs Commercial Property Insurance?
Regardless of whether you own or rent your office, Commercial Property is likely required. Landlords typically want to ensure all tenants have some basic level of coverage. Furthermore, any business that has expensive assets (e.g., specialized computers, machinery) should consider buying insurance. A rule of thumb is that losses that jeopardize the existence of business should be insured. For example, if a flood damaged all your equipment, could you afford to replace all of them immediately? If not, consider buying Commercial Property Insurance.
What is covered?
Commercial Property Insurance is meant to help startups and small businesses replace lost, damaged or stolen equipment,
Typical property covered includes
- Inventory and supplies
- Office furniture and fixtures
- Computers and electronics
- Tools and equipment in transit or used off-site for business purposes
Often, the following are not covered
- Accounts, bills & currency
- Data and electronic records
As you consider a policy, pay careful attention to the exclusions to ensure you understand the true coverage you are receiving. Also, watch out for the replacement value versus cash value clause. “Cash value” is a bit cheaper, but only pays the depreciated value of your asset. This is a good option if you can quickly find second-hand replacements of your assets. “Replacement cost” is a bit more expensive, but pays the full cost to replace the asset.
Also, consider getting a Business Interruption add-on (“endorsement”). This covers the loss of revenue or profits due to a claim. For instance, if a flood causes your call center to shut down, the corresponding loss of sales could be covered by your business interruption insurance.
Zensurance is Canada’s leading online commercial insurance broker. We offer a full range of insurance products to small businesses, with a particular focus on startups. We understand what it is to be a startup, and know the most common risks of which you should be aware. Based on that (and a lot of analytics), we recommend the ideal insurance coverage for your business.