If you run a restaurant, nightclub, food truck, retail center, or similar businesses, you need commercial property insurance policies. The insurance protects the company from going bankrupt if the building or its assets are compromised.
Commercial property coverage is robust and spans natural disasters, equipment breakdowns, accidents, spoilage, and criminal activity. Any business with a building and assets (equipment, fixtures, furnishings, art, signs) should consider property insurance.
Covered Assets
Commercial property insurance covers buildings, business property, inventory, and business interruption. Buildings policies will cover the cost of repairing and reconstructing the building following a covered event, like fire or vandalism. Business property insurance covers the structure, tables, chairs, kitchenware, computers, registers, trophies, and everything inside.
Inventory insurance covers the cost of damaged inventory, perishable and non-perishable goods. Business interruption policies cover lost income and payroll expenses incurred due to the downtime suffered when repairs are ongoing. Property insurance for commercial outlets falls under two categories: named perils and all/open perils.
Named perils coverage only pays for incidents mentioned under the policy. The insurance provider won’t cover any peril unless listed. All/open perils coverage is a contrasting policy that pays for all fortuitous incidents except those expressly excluded. The policy mentions incidents that aren’t covered by the plan, so you can purchase new policies for extra coverage.
Covered Incidents
The best commercial property policies cover various causes of loss, including disasters, accidents, and vandalism. Floods, tornados, hurricanes, and wildfires are covered under natural disasters. The policy also covers equipment breakdown, such as a broken dishwasher that can flood the kitchen and destroy the floor.
Property insurance can cover accidents like fire, provided the incidents don’t result from employee error. Spoilages are also part of property insurance coverage. The policy can cover perishable stock if goods spoil because of refrigerators failure, power outages, or contamination. Other covered incidents include criminal activity with destructive results.
Business property insurance will pay the cost of replacing a broken window, stolen computers, and damaged signs after vandalism. You can seek clarification from your insurance provider to identify all incidents covered under the policy. Leading insurance providers offer add-ons, so you can cover all perils and incidents to protect your business assets.
What To Protect
Commercial property coverage is customizable, meaning you can build your policy to feature specific perils and incidents. The best approach is to examine your business risks and determine what you need to protect and items you can leave out. Most policies allow you to purchase coverage for the building housing your business, owned or rented.
You can protect office equipment like computers, phone systems, artwork, furniture, cash registers, and appliances. Property insurance also covers accounting records, company certifications, blueprints, prototypes, and other critical documents. Other protected items include manufacturing and processing equipment, inventory/stock, fencing, and landscaping.
Some policies offer to protect your satellite dishes, signs, and posts. A thorough risk assessment will help you identify the primary risks and areas to watch. You may also consider umbrella insurance to cover gaps and extend the coverage limit. What you determine to cover depends on the assets involved (buildings, equipment, furnishing) and the operational environment or level of risk.
What To Consider
Location is one of the first things to consider when purchasing property coverage. Buildings in cities with top-rated fire protection are more likely to cost less to insure than those with limited resources. Construction is another consideration insurers make. Buildings with more combustible materials may require higher premiums than fire-resistant ones.
Occupancy and fire/theft protection are other aspects to ponder. Restaurants and buildings with multiple tenants may suffer poor fire ratings and higher premiums. Insurance providers assess risk at various levels, including proximity to fire hydrants/stations, fire alarms, and security systems. You can tweak a few things to attract lower premiums and better coverage. Don’t forget the primary areas of consideration below:
- Covered Events: Find out everything the insurance covers
- Coverage Limit: Determine how much the insurance will pay
- Claiming Protocol: Find out how to make a claim
- Insurance T&Cs: Read through all terms and conditions of the policy
Commercial Property Insurance: Bars, Restaurants, & Nightclubs
Bar, restaurant, and nightclub owners should purchase adequate commercial property insurance for their owned and rented assets. Property insurance protects the place of business, equipment, appliances, computers, fixtures, decorations, and other items. Choose insurance providers that focus on the hospitality and entertainment industry. You should also seek clarification from the provider and ask for customization options to build the best coverage.
