Massachusetts businesses that own commercial property have made a significant financial investment in their property, and that investment ought to be protected. Commercial property insurance offers protection for such property from a variety of potential perils.
Commercial property insurance is somewhat like homeowners insurance, except it’s designed to meet the needs of a business rather than a homeowner. Just as homeowners policies often offer several coverages, business property policies typically do as well. In fact, a couple of their coverages are quite similar.
Two of the main coverages that business property policies typically include are protection for a business’ building(s) and items kept within the business’ building. These can be likened to homeowners policies’ dwelling coverage and personal property coverage, with the biggest differences being the items that are insured. Instead of a home with personal possessions being insured, business property policies generally insure commercial buildings and items owned by the business. These items may include furniture, televisions, and houseplants, but they also can include supplies, products, and equipment.
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While business property policies’ primary coverages closely pattern those of homeowners policies, there is one important difference. Most business property policies don’t include liability coverage, which is found in many homeowners policies. Businesses usually must purchase separate liability coverage.
In general, businesses in Massachusetts that own property should think about getting business property insurance. Those that have loans against their property may be required to get insurance by the terms of their loan. Even businesses that aren’t obligated to purchase insurance, however, are often wise to get coverage because recovering from a disaster can be financially crippling.
Businesses that lease space normally don’t have to purchase commercial property insurance, since they don’t own the space they’re using. They still may need insurance for any inventory and equipment they have, but coverage is often available through a different type of policy that doesn’t include coverage for a building -- and, therefore, costs less.
As an example, assume there is a restaurant that leases a space in a Worcester, MA strip mall. The restaurant would likely want coverage for its food supplies and the equipment it owns, but it probably wouldn’t need coverage for the building itself. The company that owned the strip mall would normally be responsible for insuring the actual building.
As is the case with most insurance policies, the exact perils that a particular business property policy covers depend on the terms, conditions, and exclusions of the policy. Nevertheless, there are some common perils that lots of policies cover. If necessary or desired, businesses can usually find protection for the following incidents (this isn’t a comprehensive list):
Some policies also offer coverage for sewer backups and freezing pipes, either as a standard or optional protection.
Like most homeowners policies, business property policies typically don’t offer coverage for floods or earthquakes. If a business wants protection from these perils, it probably will have to get a separate, stand-alone policy.
Massachusetts businesses that need help finding commercial property insurance should get in touch with their independent insurance agent. An independent agent will be able to help a business request quotes from several insurers in the state and compare the coverages that they offer.