Business Property Insurance: What It Is, Which Businesses Need It

• Businesses that operate out of buildings they own.
• Businesses that lease or rent space. Depending on the lease agreement, a business owner might be liable in case of a fire or natural disaster. A landlord might require the renter to have business property insurance.
• Businesses based from home. While homeowners insurance might cover some expenses, it generally falls short for business owners with more than $2,500 in business equipment.

Basic causes of loss

• Fire or smoke.
• Lightning.
• Explosions.
• Windstorm or hail.
• Riots or civil commotion.
• Aircrafts or vehicles crashing into the property.
• Vandalism.
• Sprinkler leakage.
• Sinkhole collapse.
• Volcanic action.
• Glass breakage due to one of the above perils.

Broad causes of loss

• Falling objects.
• Weight of snow, ice or sleet.
• Water damage from leaking appliances, but not from sump overflow.
• Building collapse.

Special causes of loss

• Provides all-around coverage minus causes of loss intentionally excluded in the policy.

• Burglary: Most policies cover damage due to vandalism, but not all cover loss due to theft. For that, you may need commercial crime insurance.
• Flood and earthquake damage: If your business operates in an area at risk of earthquakes or floods, consider buying these insurance policies separately.
• Cybercrime and computer fraud: Instead, you’ll need cybersecurity insurance.
• Damage to vehicles: Commercial auto insurance protects cars you use for work.
• Losses in transit: Commercial property insurance typically covers losses on or near the insured company's location, but not losses that occur in transit or off-site. For that, you’ll need inland marine insurance.
• Loss due to employee dishonesty: Business owners must purchase a separate employee dishonesty policy or fidelity bond to protect against these losses.
• Income loss: If a business closes due to damage, it could lose significant income. Business property insurance doesn't cover this, but business income insurance does.

• The value of the building or property: The more a building is worth, the higher the premium.
• The value of physical assets associated with the business: A business with few physical assets of value will tend to have a lower monthly premium.
• Level of coverage: If a business owner selects a special causes of loss form instead of a basic or broad one, they will probably pay higher premiums.
• Actual cash value or replacement cost coverage: Premiums for actual cash value insurance tend to be cheaper because they offer less coverage.
• Building construction: Newer buildings built with fire-resistant materials and up-to-date electrical systems will be less expensive to insure than older buildings without these features.
• Industry: Manufacturing businesses carry a higher level of risk for property damage than office-based businesses, for example, and will generate a higher premium.
• Location: Your rate can depend on your location's crime rates, proximity to a fire station and fire hydrant, and frequency of dangerous weather events.
• Security: If the business has a security system, premiums may be lower.

• Next if you want to quickly purchase a policy online.
• Hiscox, Nationwide or Travelers if you want additional types of commercial property coverage, like equipment breakdown coverage and commercial crime insurance.
• Allstate, State Farm or Farmers for high customer satisfaction ratings.