Commercial property insurance is designed to cover your business’ physical assets in case of an accident or disaster. This generally includes the physical location such as a store or restaurant along with its contents and equipment.
Items generally covered under commercial property insurance include:
But things can become difficult when other people’s personal items are involved.
What happens if a fire breaks out and customer’s belongings are damaged?
Insurance and Third-Party Damage
As a rule, your commercial property insurance policy will not cover damages suffered by clients, customers or other third parties. This is because commercial property insurance is designed only to cover property owned or used by the business. If someone else’s property is damaged as a result of everyday business, that damage can instead be covered under general liability insurance.
General liability insurance can cover bodily injury, property damage and personal or advertising claims against your business that a third party may face.
You can generally bundle general liability insurance and commercial property insurance into a single policy known as a business owners policy.
On its own, however, commercial property insurance may not cover damages outside of your business’ ownership.
Although a basic commercial property insurance policy may not cover items borrowed or rented by the business, you can often buy endorsements or additional coverage to cover them. If your business rents or borrows equipment, you can add coverage for rented property to your commercial property or liability policies. Be sure to ask your agent about what your policy covers, as not all policies are created equal.
This can also apply to your commercial auto insurance policy. Commercial auto insurance is a type of commercial property designed to cover the vehicles owned or used by your business for work purposes. Adding Hired or Non-Owned Vehicle coverage can help cover vehicles borrowed or rented but not owned by the business.
Can Commercial Property Cover the Business Owners Belongings?
In some cases, commercial property insurance can cover some personal property owned by the policyholder if it is on the business property. This only concerns personal items you leave on your business’ property, however, such as electronics and personal belongings left in your office throughout the business day or overnight.
A basic commercial property insurance policy provides compensation for repairs or replacements for damage due to:
Accidents not typically included under commercial property insurance includes flooding and earthquakes.
Does Commercial Property Insurance Cover Employee Theft?
Theft is an unfortunately common occurrence on a personal and business level. Whether a customer steals during the day or someone breaks in at night, theft can be damaging to your business’ income. Thankfully, commercial property insurance covers theft and vandalism such as compensating for stolen items, replacing register cash and repairing broken windows and locks.
But what if a theft of your business or personal belongings is committed by one of your very own employees?
A commercial property insurance policy may not be the answer in this occasion. For compensation for employee thefts, you may instead need Crime Insurance. Crime insurance and other endorsements can help protect you from theft where commercial property insurance can’t, such as in the case of employee theft. If an employee steals, embezzles money or commits fraud, crime insurance can help compensate the business for the losses.
Do I Need to List Personal Belongings on My Commercial Property Insurance Policy?
You do not generally need to list your personal items on your policy in order for them to be covered under commercial property insurance like you would for your business’ property. The only issue with receiving compensation from commercial property insurance for personal belongings (as long as it’s a covered claim) is exceeding the limits of the policy.
For example, if a disaster occurs and covering your personal belongings would cause the policy to go over its limits for compensation, your personal belongings may not be covered.
Speak with your insurance agent about limits and exclusions under your commercial property insurance policy. Every business is different, and you deserve a policy tailored for your business’ needs.
You may also consider bundling multiple commercial coverages with a single insurer, such as those listed above, into a business owners policy. This can allow you to handle a single policy and save money on important coverages.