What Are Typically Excluded from Commercial Property Insurance?

A commercial property insurance policy helps protect the physical assets of your business, including your building, equipment, fences, inventory, furniture, and electronics, against unexpected events and hazards. However, you must understand that it will not cover everything that damages your business property. There are some exclusions in the policy, and knowing them will help you decide whether you may need any additional coverage to stay sufficiently covered in the event of loss/damage.

Common Exclusions of Commercial Property Insurance

Here are some perils/hazards that are not usually covered by basic property insurance:

1. Earthquakes/Flooding

   Like home insurance, commercial property insurance does not cover damages or losses caused by flooding or earthquake. However, you can stay protected against these risks by purchasing an additional endorsement on either earthquake or flood insurance or both depending on your requirements.

2. Commercial Auto Accidents

   Vehicles and buildings are your properties, but insuring vehicles differs from insuring buildings. Your commercial property policy will not cover the vehicles used for business purposes, so you need to buy commercial auto insurance.

3. Damage/Loss to Others' Property

   Commercial property insurance is designed to cover only the properties and belongings of the business, not unowned properties, even if they are on its premises. For example, if a customer's property is damaged in a fire accident that occurred in your company, it will not be covered under your property insurance. Perhaps this damage may be covered by your commercial general liability policy.

4. Equipment Breakdown

   While commercial property insurance pays to repair business equipment damaged by covered perils (fire, vandalism, explosion, theft, etc.), it will not cover equipment breakdown caused by mechanical issues, malfunction, or regular wear and tear. You can buy equipment breakdown coverage separately to cover such expenses.

How to Compensate for These Exclusions?

Though commercial property insurance has some exclusions, other coverages can have you covered against them, saving you from financial hardships.

• Inland Marine Insurance - Covers equipment and items that are damaged during transit over land (from one area to another).
• General Liability Insurance - Pays for third-party bodily injury and property damage claims and related expenses while protecting your business from advertising injury claims and legal expenses if you are sued.
• Commercial Auto Insurance - Protects your company-owned vehicles in the event of at-fault accidents by providing collision coverage, medical payments coverage, comprehensive coverage, uninsured/underinsured motorist coverage, etc.
• Hired and Non-Owned Auto Insurance - Covers damages and liabilities of vehicles that are rented or borrowed by your company for completing business operations.
• Equipment Breakdown Insurance - Covers unexpected or unexplained breakdown of business equipment, including emergency replacements and repairs.

These coverages, along with commercial property insurance, will help protect your business at all times against every risk. This way, you can secure your high-priced business assets and stay resilient daily.

Consult with Knight Insurance Services to Adequately Cover Your Commercial Property

Whether you need customized commercial property insurance or other business coverages, contact our insurance experts today at Knight Insurance Services. With over 100 years of service, we are committed to helping you choose the coverages you need to protect your commercial properties adequately.