It’s common for businesses to lease commercial property to use for regular operations and functions. If this applies to you, it’s possible to still be liable for damages if property you don’t own but use for business operations or purposes is damaged in some way. Therefore, it’s possible to insure commercial property you don’t own. Taking this step can be a cost-effective way to protect your business from costs associated with repair or replacement should something unexpected occur.
Leased Property You’ll Need to Insure
For some leased properties, you’ll be required by the lease contract to have insurance coverage. In this case, the lease requires the commercial property user to have property insurance for the leased commercial property. In addition to the physical spaces you’re using for your business, you may also be required to insure any equipment on the premises you’ll be using, such as copy machines and computers. With a standard commercial property policy, any leased property you don’t own that you’re obligated to insure because of a lease contract is covered as business personal property.
Commercial Property You’re Not Required to Insure
“Personal property of others” is how commercial property you don’t own is referred to for insurance purposes. This refers to property that may be included in a lease without the requirement to insure it. Limits need to be listed separately for this type of coverage. Otherwise, you may not receive much in terms of reimbursement for any damages that occur.
Why Insuring Property You Don’t Own Is Worth Considering
It can be fairly expensive to replace commercial property that’s damaged. If you own a small or medium-sized business, it can be a significant financial burden to cover repair and replacement costs. Choosing appropriate commercial insurance mitigates the financial risks that go along with using property you don’t own for business purposes. At the least, having sufficient coverage in place can make it easier to deal with commercial property damage in a way that minimizes disruptions to your operations.
Limitations with Commercial Property Insurance
It’s fairly common for property owners leasing commercial properties for business use to hold lessees responsible for any damage or risk of loss, regardless of the cause. However, commercial property insurance doesn’t cover all possible causes of property damage. For instance, property policies typically exclude losses due to floods, earthquakes, and similar events.
Commercial Property Off-Premises Coverage
With property you either own or don’t own that’s away from the main property, coverage is generally limited. What’s referred to as off-premises property coverage typically applies to commercial property that may include:
• Property you use at a temporary location
• Storage locations you’re leasing for commercial use
• Property you may be using temporarily for trade shows or similar events
Note: With this type of commercial property, you may be able to purchase extra insurance if you prefer more coverage than what’s typically offered.
It’s vital to protect your business from dangers, and commercial insurance is one of the most valuable tools you can buy to safeguard your business’s financial health. When it comes to commercial property insurance, look to the professionals at Altra Insurance Services for sound advice based on years of experience in the insurance industry. We also offer reliable homeowners, renters, and car insurance. San Diego residents can call one of our knowledgeable agents today at (800) 719-9972 to discuss their insurance needs.