Commercial Property Insurance

Commercial Property Insurance 

Typically, business owners can buy a single policy to cover businesses operating at multiple locations. However, you might need separate policies if some locations serve different functions and have different risk profiles. This could be the case, for example, if your business has an administrative office and a separate factory.

Almost all commercial property insurance policies have a “deductible,” which is the amount you must pay toward the cost of a claim before the insurer will pay. The higher your policy’s deductible, the lower your premium should be. Keep in mind, however, that you’ll have to pay more out of pocket if you have a claim. Your policy will also have a “policy limit,” which is the maximum amount the insurer will pay for any covered loss.

Commercial property policies provide either “replacement cost” coverage, “actual cash value” coverage, or a combination of both. Replacement cost coverage will pay to replace your property with new property of like kind and quality, up to the policy’s dollar limit. An actual cash value policy will pay the replacement cost of the property minus depreciation due to age and normal wear and tear. Although replacement cost coverage is more expensive than actual cash value coverage, it might better ensure that your business fully recovers after a significant loss.

In Texas, commercial property policies are not standardized. Insurers must comply with minimum requirements but have a great deal of flexibility to develop their own policies. As a result, coverages and policy terms may vary significantly by insurer and by policy.