Commercial Property Insurance Explained for 2024

12 April 2024
Commercial Property - Banner Image for Commercial Property Insurance 101 Blog

Property insurance is essential if you own commercial property that you rent out to other business owners or use for your own business. Commercial property insurance covers the structure itself like buildings and factories; including the exterior and interior walls, roof, and ceiling of your property and in some cases, it covers appliances, machinery, and floor covering – if these items are built-in and permanent parts of the property.

How Commercial Property Insurance Works in 2024

Fire, flooding, theft or accidental damage are unfortunate incidents that could not only damage or destroy your property but could also devastate your business. Commercial property insurance reimburses you for damaged or lost equipment, inventory and other property. This insurance coverage should be part of any business’ risk management strategy regardless of industry.

To maximize your coverage, you can modify your commercial property insurance coverage to protect almost every physical asset that your business owns.  A commercial property insurance policy can protect against the cost of replacing lost or damaged property such as:

  1. Furniture and fixtures which include chairs, appliances, desks and general supplies.
  2. Equipment such as computers, machineries and tools.
  3. Inventory which can include food and perishable items.

In the case that your business operates out of your residence, you would still need to purchase commercial property insurance since homeowners’ policies do not usually cover lost or damaged business equipment.

Tips for Choosing a Commercial Insurance Plan

Whether you are a new or an existing business owner it is imperative to purchase a commercial property insurance policy now to protect yourself from any unforeseen events that can occur on your property.

Here are some good tips to help you choose a commercial property plan that will suit your needs:

1. Understanding Tax Implications

Talk to your insurance agent on how you can save further on your taxes by purchasing insurance coverages as it is tax deductible. No matter where you live or where your property is located, you can take advantage of many federal tax deductions that are made available to commercial property owners across the United States.

2. Consider an Insurance Bundle

There are many additional coverages that insurance carriers can offer including flood insurance, tornado insurance, and fire insurance. All of which could be purchased individually. However, if you bundle your insurance coverages together, there is a good chance that you could save money along with obtaining better protection for your commercial property.

3. Be Mindful of Unexpected Costs

Some insurance carriers or agents may neglect to clarify all of the costs and variables upfront which could lead to you paying for a high-deductible insurance plan. Meaning, in the event of a claim, you would have to pay a substantial amount out-of-pocket before your insurance would kick in. This is not an optimal situation.

While deductibles are a standard part of property insurance, the out-of-pocket cost for the deductible varies from policy-to-policy and should be discussed in full at the time of signing to insure complete transparency of the costs.

4. Getting Multiple Quotes

Obtaining quotes from several insurance companies before making your decision can not only help you save money, but it can also provide you with better coverage. However, shopping different insurance companies is time consuming and exhausting, your time is valuable! Working with an independent insurance agency will give you access to multiple insurance rates from different insurance companies, all while only having to deal with one agent contact.

5. Learn the Jargon

It pays to learn the language. It might be daunting or complex but as you master key definitions, it will make choosing an insurance policy and coverages easier. Take some time to brief yourself on the key terms used by the insurance industry. For instance, knowing the difference between premiums, excess and deductibles will help to streamline the insurance process for you.

It can be quite tricky to determine just how much commercial property insurance coverage you would need. Insurance agents can help you work out the risks associated with your building and tenant types and can advise you on the appropriate coverage limits for your business.

A common misconception is that going through an independent insurance agency costs more for the customer in the end. This, however, is not true. Often, independent insurance agents have access to unique deals, insurance packages and other offers which are not readily available to customers directly. Independent insurance agents also provide experience and invaluable insight into what other coverages and carriers you might want to consider.

A few changes that affected Commercial Property Insurance for 2024:

  1. Market Conditions and Trends:

  2. Stable Outlook for U.S. Commercial Lines:

  3. Specific Rate Expectations:

  4. California Non-Renewals:

  5. Pricing Expectations:

Extra Information

Commercial property insurance buyers in California can expect further rate hikes this year due to a confluence of factors, with catastrophe-exposed and loss-hit accounts bearing the brunt of tightening capacity and increases of 25% and higher.

California Insurance Commissioner Ricardo Lara said that the state’s Fair Access to Insurance Requirements Plan has agreed to increase its commercial property coverage limits to $20 million per location for businesses unable to find coverage in the traditional market.

Megan Mercer - Inszone Insurance Commercial Insurance Specialist

Megan Mercer

Commercial Insurance Specialist

Megan Mercer is a Commercial Insurance Specialist at Inszone Insurance Services, joining Inszone in October 2023. Megan earned her BFA from Stephens College in Columbia, MO. Megan’s insurance journey began right after college in 1999, starting with recreational products, then transitioning to personal lines sales and service, and eventually moving into commercial lines sales.

Megan takes great pride in her ability to connect with others, displaying a personable and professional demeanor. With her extensive experience in various insurance roles, she possesses a comprehensive understanding of policies, processing changes, and handling claims, enabling her to effectively assist clients with their insurance needs while infusing every interaction with a positive energy.

Outside of her insurance career, Megan is an active member of both the Lee’s Summit Chamber of Commerce and Rotary club. Additionally, she showcases her talent and creativity in improv comedy since 1999 with various improv groups in Kansas City. Megan is a proud member of the all-female comedy group Pretty Funny, and has performed at the 2009 and 2010 Chicago Improv Festivals with SPITE.

In her time off, she enjoys spending time with her husband and son, engaging in activities like traveling, working outdoors, and enjoying movies.

Change Contrast
Change Font Size
Reset to Default Settings
Close the Toolbar