Hurricane Katrina was one of the most costly storms in United States history, costing $125 billion in damages. This doesn't include costs from the economic fallout as people lost jobs and businesses were destroyed.
Commercial property insurance isn't a miracle fix-all solution, but it can ease much of the stress of rebuilding your company. Below, we discuss:
- Why business insurance coverage matters
- Commercial coverage options
- How to make property insurance claims
Keep reading our Mt. Laurel insurance guide to learn the basics and a few handy insurance claims tips.
Why Commercial Property Insurance Matters
Here's an interesting fact -- you're not legally required to have commercial property insurance in some states, including New Jersey. However, it's advised to have it in case something happens.
This insurance protects physical items like inventory, equipment, and the building itself from unexpected events and damages like:
- Hurricanes (and other types of storms like tornados)
- Fires
- Theft
- Vandalism
- Water damage
- Although it doesn't cover every type of water damage
Business insurance coverage takes care of the heavy financial burden of replacing assets. You can focus on restoring your business and the insurer prevents you from paying out of pocket.
What Doesn't Business Property Insurance Cover?
Property insurance is strange and has various technicalities. For example, it technically doesn't cover flood or earthquake damage; you need a separate policy for those events.
However, typical policies cover water damage from piping. A leaky roof or storm damage may require an added provision. You also won't receive coverage for:
- Mold
- Employee dishonesty
- Normal wear and tear
- Exposures with vehicles requiring motor vehicle registration
What Determines Insurance Costs?
Commercial coverage options differ in price based on various factors -- one being the type of coverage you choose. Here are two valuations tied specifically to the building:
- Replacement cost: how much it costs to replace with new construction
- Actual cash value: the replacement value minus depreciation
You should choose this based on your ability to rebuild after an event. Insurance based on actual cash value may come with lower premiums, but you might pay vastly more for the rebuilding process.
Replacement value insurance may see a yearly premium increase. That said, your out-of-pocket costs while rebuilding will likely be lower. Other cost factors include:
- Location: is the area prone to natural disasters and storms?
- Occupancy: some industries carry less risk than others
Insurance Claims Tips: Understanding the Process
Making an insurance claim can be complex, so here are a few tips to make the process less stressful. Here is what the process will look like:
- Understand your policy
- Document the damage
- Take pictures of damaged areas
- Take inventory of lost/stolen items
- Work with the adjuster to assess the damage
- Get an estimate for repairs and/or replacements
- Call contractors and complete the repair work
- Settle the claim with your insurer
Making Business Ownership Easier
Owning a business can be hard and costly work. You technically don't need commercial property insurance, but it can make life less difficult after an emergency.
PMI Garden State is also here to make business ownership less stressful. We can handle all the management aspects, like property maintenance and accounting.
We can even estimate how much your property could be worth. Contact us today to get started.
