Businesses that have commercial properties have made significant financial investments in their properties, and the businesses are often dependent upon the properties in some way. For these reasons, it’s imperative that businesses protect their properties. Commercial property insurance gives businesses in Massachusetts a way to protect their properties against a number of perils.
Commercial property insurance policies are similar to homeowners policies, except they’re designed to insure business properties rather than single-family homes. They may contain more coverages and/or higher limits than homeowners policies because commercial properties frequently are worth more than single-family homes.
Most businesses that own commercial property in Massachusetts ought to consider getting business property insurance. In some cases, businesses may be required by the terms of a loan or lease to carry coverage. When coverage isn’t compulsory, it’s often still a good idea to procure coverage since few businesses have the resources to completely rebuild their properties.
Additionally, commercial properties aren’t just for businesses that own buildings and land. Businesses that have equipment, inventory and supplies may want a business property policy to insure these items.
While coverages can vary from policy to policy, most business property policies have two main coverages:
Buildings Coverage, which typically provides protection for commercial buildings
Contents Coverage, which typically provides coverage for equipment, inventory, supplies and similar items
Businesses may choose to supplement these coverages with additional, more specific coverages. The other coverages that are available depend on what a particular insurer offers.
Business property policies normally don’t include liability coverage because businesses have diverse liability coverage needs. To get the liability protections they need, businesses usually purchase general liability insurance and/or other liability policies.
In general, business property policies don’t include floods and earthquakes among their standard protections. Some policies may offer these protections as an optional add-on. If a policy doesn’t offer flood and earthquake coverage as an option, a separate policy may be needed to obtain protection against these risks.
Most commercial property policies are either open-perils or closed-perils policies. Open-perils policies normally cover any risks that aren’t specifically excluded in the policy’s paperwork. Closed-perils policies typically only cover risks that are listed in their paperwork. As a broad rule (to which there are exceptions), open-perils policies tend to offer more robust coverage than closed-perils policies.
Insurance companies consider many factors when calculating commercial property policies’ premiums. In addition to the coverages and limits that a business selects, an insurer may take into account:
The location and construction of a property
The size of a property and how it’s used
The security features installed on a property
The business’ past claims history
Other factors that assist with risk-assessment
Massachusetts businesses that need coverage for a commercial building should talk with a Garrity Insurance agent who specializes in commercial property insurance. Our agents are familiar with commercial property policies and will know the nuances of these policies and have informed coverage recommendations. They’ll know what protections a business should look for based on the particular needs of business' property. Since we're independent, our agents are free to recommend multiple policies from different insurers.