Real Estate Insurance Solutions For Commercial Businesses

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Regardless of whether you use your property for housing, meaning your rent-out flats or apartment units, office spaces, etc. or you run your own personal business from within the building – your goal should always be to protect yours and your company’s assets in any way possible. Real estate is generally very vulnerable to all kinds of damage, namely environmental, but there are other problems that can occur from time to time.

Arguably the best way to protect your assets and your properties is to insure them. You’ve already spent time and money to purchase a property or build a business from the ground up, therefore, it would be very irresponsible of you to leave it all to chance.

That is where real estate insurance for commercial business, or just commercial property insurance, comes into play. It is the single best way to protect your property from unnecessary losses that may occur.

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Types Of Real Estate/Commercial Business Insurance

Generally speaking, when we talk about real estate insurance solutions, we focus on two of the most common types of policies – commercial property insurance and general liability insurance. Which of the two you need or require, depends on the type of property you own and the commercial business you run. In some cases you need one of the two, in others, you need both and sometimes you need a custom policy to protect all of your interests.

To fully understand which real estate coverage solution is best suited for your commercial business, we have to understand what each of them covers and protects from, as well as how they work in conjunction.

What Is Commercial Property Insurance?

To put it simply, insurance used to cover any kind of commercial property is called commercial property insurance. It covers the asset from all sorts of damages and perils, such as – natural disaster, fire, theft, vandalism etc. Virtually any business out there, regardless of what it is that they do, can benefit from this kind of insurance. Taking out a commercial property insurance policy is widely regarded as a necessity, not only a good business decision.

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What Does Commercial Real Estate Policy Cover?

As we have previously and briefly mentioned, these policies protect real estate assets from various kinds of perils. According to statistical data, a physical property, such as a house or a building, is most likely to be damaged by extreme weather conditions. With that in mind, most real estate coverage policies cover the damages done by harsh weather conditions, with the exclusion of floods and earthquakes. However, you can insure against those, as well, but you’ll have to work out a special deal.

In addition to that, many commercial businesses suffer from man-made damages such as theft, vandalism or arson. However, most base coverage packages do not cover those damages, as it would have to include ensuring inventory and equipment, which does not fall under the real estate umbrella. On the other hand, it is once again possible to work out a deal that covers against it these damages as well. But in most cases, a separate (crime) policy is used to cover these losses.

What Is General Liability Insurance?

Simply speaking, liability refers to any damage you or your company can be held responsible for in the court of law. According to Friscia & Associates, a company from Newark, any small, mid or large commercial business is at all times exposed to all kinds of liability risks, which is exactly why, every business needs a commercial general liability coverage policy.

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What Does Commercial General Liability Insurance Policy Cover?

The CGL coverage policy is designed to protect businesses and business owners from an unexpected financial loss or a lawsuit, in case they’re found in the situation where they are being held responsible, or liable, for any injuries or property damage done to a third party. You can be liable for these injuries or damages if they have been caused by your product, service or if they occurred on the premises of your property, which is why this coverage policy is often associated with real estate insurance solutions.

Which Factors Can Affect The Policy’s Premiums?

These kinds of coverage policies aren’t cheap. To be fully protected, you will have to pay a hefty annual premium to your insurer. With that in mind, here are some of the key factors that are considered when drawing up an insurance policy.

  • Location – Buildings, or any other properties for that matter, will be judged based on their location. For instance, properties within city limits are more likely to get lower premiums.
  • Construction – Construction materials from which the property is made out of are also considered when drawing up a coverage policy. Buildings made out of materials that are prone to fire or water damage usually require higher premiums.
  • Occupancy – The way the property’s used also affects the premiums. More people equals higher premiums.
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Of course, we’re there are other contributing factors, as well, such as the value of the property, age, condition etc., but we figured we wouldn’t highlight the obvious ones.

Which Commercial Real Estate Insurance Solution Is The Best For Commercial Businesses?

The coverage policy you need heavily depend on the type of property you own and the commercial business you run. There is no single best policy for every commercial real estate property out there. One thing is certain though – every business should have one.

In general, it is advised for small and medium companies to purchase a coverage policy known as BOP (business owners policy). The BOP includes both CPI and CGL coverage policies, which should be more than satisfying for most real estate and business owners as it will cover not only the property but the liabilities of the business as well.

Large companies, on the other hand, can greatly benefit from custom insurance policies that will cover all of their liabilities, properties and other assets.

As you can tell, there is more to real estate insurance solutions than it initially meets the eye. We have tried to present you only with the most useful information regarding the coverage solutions and we can only hope we have managed to help you.