Commercial Property Insurance for Small Business Owners
What Does Commercial Property Insurance Cover?
Commercial property insurance protects physical assets your business owns or leases against perils including fire, theft, vandalism, windstorm, and water damage (excluding flood). Standard policies cover:
- Buildings: The structure you own or are responsible for under your lease.
- Business Personal Property (BPP): Equipment, inventory, furniture, computers, and supplies inside the building.
- Business Income: Revenue lost and ongoing fixed expenses while your location is being repaired after a covered loss.
Replacement Cost vs. Actual Cash Value
Replacement Cost Value (RCV) policies pay to rebuild or replace property at current prices. Actual Cash Value (ACV) policies deduct depreciation — meaning a 10-year-old roof with $50,000 replacement cost might only yield $20,000 in an ACV settlement. Always choose RCV if possible.
Average Annual Premiums (2024)
| Business Type | Property Value | Annual Premium |
|---|---|---|
| Retail boutique | $250,000 | $1,200–$2,800 |
| Office (leased) | $150,000 BPP | $800–$1,800 |
| Light manufacturer | $1,000,000 | $5,000–$12,000 |
Frequently Asked Questions
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