What is the Standard Deductible in a Commercial Property Insurance Policy?
Deductible amounts can vary between different insurance providers. Depending on your business, your deductible can range from a few hundred to thousands of dollars. When you get your commercial property insurance policy, you'll choose a deductible that makes sense for you. Generally, if you opt for a higher deductible, your insurance premium will be lower. If you already have commercial property insurance but you're not sure how much your deductible is, you can check your policy any time.
What is the Cost of Business Liability Insurance in Calgary?
The cost of your business liability insurance will vary depending on a variety of factors. However, for a small business located in Calgary, you can budget to spend around $1250 annually on basic commercial general liability insurance with a $2 million limit. This package would also include some applicable property coverage. However, the exact cost of your insurance policy is influenced by factors including:
- Industry
- Risk exposure
- Years of experience
- Location
- Number of employees
- Revenue
- Insurance claim history
What are the “Limits” on a Commercial Property Insurance Policy?
Your commercial property insurance policy specifically covers property owned by your business. This property must have either been purchased by your business or its ownership transferred from someone else to your business. It needs to be essential to the operations of your business, even if it's not directly tied to your revenue stream. An example of this would be a handyman franchise; your head office is key for your operations, although your technicians dispatched remotely are the main source of revenue.
It's important to note that while commercial vehicles could be considered business property, there are separate insurance policies—a commercial auto insurance policy—designed to protect business vehicles.
How Does Commercial Property Insurance Protect Your Business?
If you don't have commercial property insurance, your business’s most important physical assets won't be protected in the event of theft, an accident or a natural disaster. This policy protects your business’s real estate and its contents—including products, merchandise and even office supplies. It helps pay for the repair or replacement when your property or contents within the property are lost, damaged or destroyed.
Should the worst happen and you don't have insurance, your business's operations could be jeopardized. This may cripple you financially and even cause you to shut down your business.
Is Commercial Property Insurance Legally Mandatory?
When it comes to commercial property insurance, Calgary business owners should be aware that it is not legally required by the government. That's the case with most types of business insurance, with the exception of commercial auto insurance. But just because it's not legally mandatory, that doesn't mean it's possible to go without it.
Aside from the fact that your business could be threatened by the high costs associated with recovering from severe property damage caused by a fire, natural disaster, theft or other peril, you will come across many people, from leasing agents and landlords to suppliers and customers, that will require you to have the right type of insurance coverage before they will do business with you. If you're not able to provide adequate proof of insurance, you'll be forced to walk away from lucrative deals and needed contracts.
Does Your Small Business Need Commercial Property Insurance?
Whether you own or rent an office, workspace, brick-and-mortar store, restaurant or manufacturing plant, as a business owner you'll need commercial property insurance. Firstly, most landlords often require proof of commercial property coverage from their business tenants. If your business requires a loan, lenders typically also require commercial property insurance for the duration of the loan.
Secondly, even if commercial property insurance is not required—say you own the building yourself—it's still important you have adequate coverage for your business. It's important to insure equipment, inventory and the property itself. Accidents do happen, and unexpected losses can be devastating for your business. You should be prepared for the worst.
It's important to note that while your landlord might have commercial property insurance for the building your business operates out of, should an accident happen, they will not likely take responsibility for any property or contents kept within your space. For instance, if your cash till is robbed, the landlord's insurance will not protect you.
Is Commercial Property Insurance Necessary for a Home-Based Business?
That depends on several key factors, including the nature of the business and how much equipment, stock and inventory you keep in your home for business purposes. Many people assume that they don't need any additional property insurance coverage if they already have homeowners insurance in place, and that's not exactly true. You do need some type of insurance coverage for your home business, but may be possible to add a home-based business endorsement to your existing home insurance policy or tenant insurance policy, and in that case, a separate policy for commercial property insurance in Calgary is not necessary.
Is Theft Covered Under Commercial Property Insurance?
As we mentioned above, theft is covered under a standard commercial property insurance policy. This includes both the physical structure and any contents within the property. That said, it's important to note the limitations of this coverage.
In most policies, there is a stipulation that your property is only protected under your business insurance policy as long as they are on your property at the time the theft occurs. Should you take any equipment, inventory or merchandise off your business property—more than 100 feet from the location listed on your policy—the items are no longer insured.
An example of this would be if you have multiple store locations and are making a transfer of goods. If one of your employees is in transit while moving the goods—say jewellery—and they stop to pick up a coffee and the inventory is stolen out of their vehicle, you won't be protected for the loss.
If you often move goods or equipment, you need a different kind of coverage to ensure you're protected from theft while the goods are in transit. This is called an inland marine insurance policy. To learn more about an inland marine insurance policy and whether or not you need this particular coverage, speak with a Krywolt Insurance broker today.
Are BOP and Commercial Property Insurance Related?
Yes. A business owners policy (or BOP insurance policy) typically includes three types of coverage: general liability, commercial property and business interruption insurance. It's essentially an insurance package that's geared toward small businesses with low-risk profiles and basic coverage needs.
However, a stand-alone commercial property policy offers broader coverage and higher limits. This is reflected in the cost. The kind of coverage appropriate for your business depends on your needs, which is why it's important to talk to a qualified broker at Krywolt Insurance about what coverage is best for you.
What Isn't Covered by Commercial Property Insurance in Calgary?
When considering commercial property insurance, Calgary policyholders should be aware that it does not cover business vehicles, property that's been taken away from the business premises, and any perils that are either listed as exclusions in an all-perils policy, or listed as inclusions on a specific perils policy. Also, as stated above, a commercial property insurance policy does not include coverage for liability unless added specifically or by a separate policy.
