Commercial property insurance, a type of business insurance, provides coverage for all expenses incurred to repair and/or rebuild business premises and replace stock and/or equipment as a result of damage. To this end, it provides protection against such risks including but not limited to:
- Bursted pipes
- Falling trees
- Subsidence theft
- Other types of damages
Commercial property coverage requirements can vary by state. In the Commonwealth of Virginia, there are two primary types of commercial property insurance. The different coverage options each provide their own unique advantages. In general, the main types of coverage plans include:
- Building insurance
- Contents insurance
Building Insurance in Virginia
This type of Virginia business insurance caters to the cost of rebuilding or repairing business premises in cases where they have been destroyed or damaged. Although it is not a requirement under Virginia law, most mortgage providers will only provide businesses with a loan the company agrees to take out such a policy.
In instances where the business actually own the premises in which it operates, owners should still weigh the benefits of this type of coverage. It will protect businesses in situations when they need to rebuild or repair property after any of the insured risks occur.
However, if you are renting the business premises, it is the responsibility of the landlord to provide building insurance. Regardless, it doesn’t hurt to get contents of the building (including your business stock and equipment) insured. Similarly, commercial property insurance in Virginia requires that business owners acquire coverage for the cost of rebuilding their business premises.
Most Virginia business insurance plans for buildings will not protect organizations in situations such as:
Acts of Terrorism / War – Building insurance typically excludes damage that is caused by acts of terrorism. However, for an additional premium, some Insurers may be able to provide additional coverage against such an event. For terrorism, the Pool Re Scheme provides government funding to protect businesses against losses arising from damage caused by terrorist acts.
General Wear and Tear – In many situations, Virginia commercial building insurance plans do not provide coverage against aging and everyday wear and tear of the premises.
Contents Insurance in Virginia
Contents insurance protects against loss, damage and theft of business stock and equipment, should the insured risk occur. This means that businesses will receive compensation to replace vital stock and machinery that is insured.
Valuing Equipment and Stock
If possible, businesses should make sure that their contents insurance provides coverage for your business stock against its actual cost price (and not its potential sale price). There are two types of contents insurance for business equipment. These include:
Replacement – New policies will replace items that were damaged beyond repair or stolen with new ones.
Indemnity – Indemnity insurance considers wear and tear. Therefore, your items will be replaced at their current value.
This type of insurance will protect businesses in instances where they are not able to do business as usual after the damage of premises, stock and/or equipment. This coverage will typically be offered as extra coverage once businesses acquire contents or building insurance. Additional coverage can protect businesses against the following:
- Shortfalls in pre-tax profits arising from the insured event/risk.
- All increased costs of operating your business resulting from the insured event (such as extra accounting fees).
More on Commercial Property Insurance in Virginia
The right commercial property insurance coverage will enable your business to be able to pay to replace or repair property that was damaged by risks covered under the policy. It can also help to pay for the replacement of lost and/or stolen property.
You can get a single policy to provide coverage to your business even if you have branches in different parts of the state. However, this will not be applicable if the branches have different risk profiles and functions. For instance, if your administrative office and headquarters are located in one area and your factory at another, then you might want to get your Virginia business insurance setup to protect both premises under one policy. Talk to a business insurance professional to understand whether this is possible, or if you will be required to take out separate policies for each premise.
Similarly, you need to understand that your Landlord’s policy will not protect the assets you use to do business within the building. Therefore, you should consider getting contents insurance or tenant coverage. This way you can feel more at ease knowing that you will be compensated if your merchandize, furniture, or machinery gets damaged or stolen. In many cases, tenant coverage is usually cheaper than building insurance. This is because the policy only protects the contents of the property, and not the building itself.
Contact BBG to Learn More!
Understanding commercial property insurance requirements in Virginia will go a long way in helping you decide on what is best for your business. To discuss your different options and determine a strategy that best fits your organization’s needs – contact a business insurance professional at BBG today for more information on our business insurance solutions.