Have you recently invested in your first commercial property? Are you looking to update your insurance portfolio to include your new purchase?
Purchasing commercial property insurance is a crucial way to ensure that your investment is protected from any eventuality. Keep reading as we highlight the top ways that having a commercial property insurance policy will benefit your business.
Understanding Commercial Property Insurance
Commercial property insurance protects your physical assets on the property from damage and loss. This type of insurance typically covers the following:
- Buildings
- Equipment and inventory
- Business interruption
- Injuries to employees
Many Benefits to Consider
Whether you’re running a business on your commercial property or leasing it out, many risks can hamper the safety of the building or other assets in the space. With this in mind, businesses of all sizes need to invest in adequate commercial property insurance. Here are the top reasons why.
1. Covers Potential Loss of Rental Income
If you’re going to be leasing your property out, you will be expecting to generate rental income every month. This can be hampered if the building, or other assets that you’re leasing out, become damaged due to unforeseen issues. Your commercial property insurance will cover mortgage and rental costs for a predetermined period.
2. Protects Your Business From Malicious Damage
Malicious damage typically refers to instances of vandalism where a third party has willfully damaged the building or other assets on the property. Common examples of malicious damage include the following:
- Physical damage such as breaking windows
- Graffiti such as spray painting buildings or assets
- Arson which is defined as deliberately setting fire to the building
3. Covers Damage Caused by Natural Disasters
Australia is well-known for its unpredictable climate which makes coverage against potential natural disasters essential, especially in high-risk areas. In this aspect, insurance covers damage to the building and roof.
Roof repairs or replacement can be quite costly. This is especially true in larger commercial buildings, this cover will come in handy if there’s a tornado, hurricane, tsunami or bushfire that affects the day-to-day running of your business. Since there’s no way to predict when a natural disaster is going to happen or how devastating it’s going to be, it’s always a good idea to invest in the cover in advance.
4. Insures Against Public Liability
Commercial businesses that deal with the public such as retail stores and restaurants have a high risk of having to deal with personal injury claims. This happens when a member of the public gets hurt on the property.
Slip and fall accidents are the most common examples of this. In these instances, the injured party may choose to sue your business for failing to ensure that the premises are safe. This can mount up to considerable legal costs if you don’t have the necessary insurance cover.
5. Protects Against the Cost of Dealing With Water Damage
Water damage is on the list of experiences that every property owner dreads the most. Increased rainfall and changes in global weather patterns mean that some areas in Australia will be more at risk of severe storms.
Water damage can also occur from faulty plumbing, which can lead to considerable costs to repair. Keep in mind that this can be made worse if equipment such as computers and industrial machinery are also damaged. The right insurance ensures that you’re covered for this.
6. Offers You Peace of Mind
Whether you’re using your commercial property for your own business or renting it out, having the right insurance coverage in place will give you peace of mind that your investment is as protected as possible. This allows you to focus on running your business, or at the very least, you won’t have to worry about whether you’ll get your rental income from your tenant when they’re hit with an emergency.
7. Many Coverage Options to Choose From
A huge plus of this type of insurance is that there are various coverage options to choose from, ensuring that your business will be properly protected at an affordable premium. Some of the factors that will determine the types of coverage that your commercial property will qualify for include the following:
- Industry type: The type of business that is being run out of your commercial property will be a top determining factor in the cost. For instance, an industrial company or restaurant will require more extensive coverage than an administrative office. This is because the risk is higher in the former.
- Location: Some areas are riskier of natural disasters such as bushfires, while others in the city may be more susceptible to vandalism and business interruption. That means, your premiums will also be influenced by your property location.
Final Thoughts
The right commercial property insurance will ensure that you’re covered against instances such as natural disasters, malicious damage, and loss of rental income. Speak to your local insurance broker will help you find the best type of coverage for your type of property and business needs. This will give you and any potential tenants peace of mind that there won’t be issues down the road.
