The Many Types of Commercial Property Insurance

Commercial property insurance is a common type of business insurance that small business owners should have in their insurance toolbox. It’s one of the most important “protective” investments that a small business owner can make to protect the future of his business.


Property insurance protects by paying for losses and damages to commercial and personal property. For instance, what happens if there is a fire in your small business office? What if a pipe bursts and ruins your furniture, carpeting and valuable documents? Suppose Mother Nature causes damage to your outdoor signage and awning? Without property insurance, you could encounter financial losses that may turn out to be a major financial setback for your business. Let’s take a look at some of the various types of commercial property insurance.


    • Boiler and Machinery Insurance. This type of business insurance, also referred to as equipment breakdown coverage, covers you in the event of an accidental breakdown of machinery and equipment such as boilers and computers. This coverage not only reimburses you for property damage, but business interruption losses.
    • Builders Risk Insurance.Builder’s risk insurance policy covers losses, such as those due to a windstorm, while your building is under construction.
    • Business Interruption Insurance. If your business suffers income loss and increased expenses resulting from business interruptions caused by property damage loss, business interruption insurance covers items such as salaries, rent, and taxes.
    • Crime Insurance. Crime insurance protects the small business owner against theft, robbery and burglary of cash, stock, securities and fixtures, whether from third parties or employees.
    • Debris Removal Insurance.If your building is affected by a flood, fire or other storm, debris removal commercial property insurance will pay for the cost of removing debris from your property. Keep in mind that for this type of situation, your property insurance will pay for rebuilding your building, but debris removal insurance will cover clearing out the old debris prior to rebuilding. Usually, debris removal coverage is included in the property form with a sublimit of coverage.
    • Fidelity Bonds. Fidelity bonds are another type of business insurance which provides coverage when a bonded employee steals money or business property.
    • Glass Insurance. To protect you against broken store windows, add a glass insurance policy to your business insurance portfolio.
    • Inland Marine Insurance. If you’re in a business where you have customers’ property on your premises, inland marine insurance will cover this on-premise (or in-transit) property should there be damage or loss. A good example of this is dry cleaning items left at a dry cleaning store. If the clothing is damaged due to a fire, inland marine insurance will cover the cost.
    • Ordinance/Law Insurance. Ordinance insurance, also referred to as law insurance, provides coverage for expenses relating to demolishing and rebuilding your building to code, when your building has been destroyed by a certain percentage, which is typically 50 percent. Although property insurance will cover your building’s replacement value, it won’t cover rebuilding to current building codes, which may be significantly different than when your building was originally built. Therefore, you’ll need to add ordinance or law insurance for rebuilding to current code coverage.
    • Tenants Insurance. Tenants insurance is another type of commercial property insurance which covers damages to the building due to employee negligence or when making improvements to your rental units.