Commercial Property Insurance – what does it cover?

It is worth noting that Commercial Property insurance can be purchased for structures only and not land (i.e. if a building catches fire or suffers structural damage).

What it does cover though are any items on the property as well as liability for claims made against you.

What this means in essence is that you are indemnified from damages, whether profits have been made or not.

What is specifically covered varies slightly from insurer to insurer and area to area but generally includes the following:

  1. Loss of rent should your offices become unusable through fire etc.;
  2. Loss of profit while premises are being repaired;
  3. Damage caused by faulty goods sold or held at your premises;
  4. Cover against a range of incidents, including theft, vandalism, malicious damage and fire;

Insurance contracts take the form of indemnity insurance products.

What this implies is that the insurer only has to pay the amount you have specified in your policy and not a penny more.

This means it is worth checking what kinds of quantities each party considers reasonable for different scenarios.

A fairly standard list of insured events for commercial property insurance include:

  • Fire
  • Escape of molten material from its intended confines at things
  • Lightning
  • Explosion or implosion
  • Storm, wind and rain
  • Water damage caused by leaking from damaged pipes, water systems, tanks or drains, or by a damaged main near the building
  • Impact
  • Riot or civil commotion
  • Malicious acts
  • Earthquake
  • Accidental damage