Commercial Property Insurance Explained
What is Commercial Property Insurance?
Commercial property insurance is a type of insurance policy purchased by businesses or corporations. Dissimilar to commercial insurance, commercial property insurance is a specific type of policy that provides coverage specifically to the physical property of the underlying business or corporation.
That being said, commercial property insurance not only covers the tangible land where a business is built or operates on, but the capital equipment and the contents of the building owned by the underlying company. All forms of commercial property insurance will provide coverage to these areas; however, the stipulations of each policy will define the specific types of coverage and the amount of damage that will be compensated for, which may include fires, natural disasters and theft.
How does a Commercial Property Insurance Policy work?
A commercial property insurance policy works similar to a homeowner’s property insurance policy. In this fashion, the underlying business will pay a premium to possess the policy in place after an underwriter evaluates the specific application. If the applicant qualifies for coverage and incurs a covered incident to a piece of covered equipment or real property, a claim is subsequently filed with the underlying insurance company.
Following this process, a claims adjuster will assess the particular claim to evaluate whether or not the claim falls under the scope of commercial property and qualifies under the specific type of coverage activated by the underling party. This process is mandatory before the insured party will receive compensation for the damage incurred.
What does a Commercial Property Insurance Policy Cover?
Although all commercial property insurance policies cover the land and capital equipment purchased by a particular company, different types of coverage will insure different damages, such as fires; if a peril commercial property insurance policy is purchased. For example, machinery insurance is a type of commercial property insurance that will provide coverage for accidental damages placed on a company’s machinery and equipment.
In contrast, a debris removal commercial property insurance policy will compensate the business owner for removing debris left from a covered event, such as the remains that exist from a fire-damaged building. Furthermore, business interruption coverage is another type of commercial property insurance that will reimburse a business owner for the income lost and expenses incurred after covered damage is present and until the damages incurred are replaced or repaired.