Essential Coverages for a Commercial Building Owner

When it comes to insuring your property, ensuring it is classed correctly is an essential first step, as there are some major differences between insuring a residential property and a commercial one.

If you are wondering whether your property can be considered commercial or not, you simply have to ask yourself, “Is the property being used to generate an income, either through capital gains or rental income?”

If the answer is yes, and you own property that falls into the categories of commercial real estate, investment property, or income property—such as an office space, a retail space, a leisure facility, or a healthcare facility—then it is integral to have insurance that is tailored to the needs of such a commercial building.

What is commercial property insurance, and why is it necessary?

To have sufficient coverage for your commercial building, the best type to start with is commercial property insurance, which can also be classified as commercial building insurance or commercial rental insurance.

This type of policy will cover physical loss or damage to your commercial property and its contents in the event of a fire, hail, windstorm or other perils that your property faces, such as theft or vandalism.

Of course, the exact coverage of your commercial property insurance policy will vary depending on the location of your business, its type, and the state that the property is in.

However, most of the time, such policies include coverage of all the essential elements, such as equipment, supplies, electronics, fencing and landscaping, furniture and fixtures, tools and equipment used off-site for business purposes, and more.

Unfortunately, you never know what hardships your commercial property may face or how much damage these situations may result in. While we always hope for business as usual, accidents can occur unexpectedly, compromising your business’s financial stability if you are not adequately prepared and covered.

Commercial property insurance will provide peace of mind, as you will not have to worry about paying out of pocket for the costs that can come with events such as a break-in in which windows are smashed, or a fire that destroys multiple essential tools and pieces of equipment.

The Different Types of Commercial Landlord Insurance Policies

As you look into building owner insurance in Ontario, you will find that commercial landlord insurance policies come in two main types: all-risk policies and named perils policies. The following are the main differences between the coverages offered by these two distinct types of commercial property insurance:

All-Risk Insurance

If you invest in an all-risk policy, your business will be covered in the event of any incident that arises from an insured peril your policy does not specifically exclude.

In other words, while certain all-risk policies may mention that they do not include coverage of a few particular situations (such as damage caused by an earthquake, for example), all other types of incidents that are not explicitly named in the policy are generally covered if they take place and result in damage to your property.

Named Perils Insurance

On the other hand, if you opt for named perils insurance, you will only be covered against specific perils that are expressly named in the policy. You still may be covered against many different disastrous situations. However, the key is ensuring these situations are specifically noted as being covered in your policy without any room for ambiguity.

What enhanced coverage options for commercial properties are worth considering?

While basic commercial property insurance policies are required, there are ways to strengthen the coverage of your commercial property through various customized policy extensions.

Through these extensions, you can widen the number of situations under which you are covered, making your policy more comprehensive and heightening your business’ protection. The following are some common examples of policy extensions that can typically be added to commercial property insurance:

Rental Income Coverage :

If you generate income through rent at your commercial property you may wish to consider rental income coverage. If your property becomes damaged due to an insured peril and the unit or building is no longer habitable, rental income coverage can help to avoid financial loss. Rental income would cover the lost revenue that would have been generated if the tenant was still there.

Business Interruption Coverage

Generally, when damage caused to your commercial property by something such as a fire or a flood is severe enough, your business operations may be negatively impacted for some time and may even come to a complete halt.

In such circumstances, it helps to have business interruption coverage. This add-on will help cover lost income during this tough time and any extra expenses you incur while you must repair or replace your commercial property following an incidence of peril.

Equipment Breakdown

All businesses depend on some form of equipment to run their day to day operations. Whether you are a smaller business that operates off of a main electrical panel, or a larger business that relies on production machinery. A breakdown to one of these key pieces of equipment can cause substantial unforeseen expenses.

Earthquake Coverage

Most standard commercial property policies do not cover damage caused by earthquakes, but if your property is located in an area prone to earthquakes, you can add such coverage.

With this coverage, any damage caused by an earthquake will be covered, as well as that caused by an earthquake-induced avalanche, snow slide, or landslide.

Flood Coverage or Overland Water

Overland water coverage or flood coverage can be added to your policy to protect your commercial building and contents from sudden accumulation of surface water or flooding.

It is important to note that not all buildings are eligible for overland water coverage, depending on where it is located.

It is also important to be aware that seepage and leakage that has been ongoing is not covered by your insurance.

Sewer Backup Coverage

This coverage is designed to protect you from financial loss due to sewer backup. This can be from a septic tank, storm drain or sewer. Coverage would be provided for the damage to flooring walls, furniture and other contents that may be damaged from this peril.

How James Campbell Insurance Can Ensure Your Commercial Property Has the Coverage It Needs

If you want to ensure that your business is well-protected in the event of unexpected perils, and you are in the market for building owner insurance in Ontario, James Campbell Insurance can help you secure a comprehensive policy.

Our policies cover every possible type of commercial property, including office buildings, industrial plazas, storefronts, and more. So, no matter the size of your building or your type of business, we are confident that we can find you a policy that fits your needs.

Someone from our team of insurance experts would be happy to discuss your particular requirements so that we can best assess how to accommodate your needs and suggest coverage extensions that will provide you with the necessary protection.

Our clients are at the heart of everything we do. This is why we have been putting them first for over 40 years and why we always do everything possible to meet and exceed their expectations.

We offer a wide variety of personal and commercial insurance options for you to choose from, including vehicle, home, and business insurance policies, as well as many others. We would be happy to offer guidance regarding how to combine policies to help you maximize your savings!

For more information about how we can help you with building owner insurance in Ontario, or to get a quote on a policy for your business, call James Campbell Insurance at 1-833-459-1065 or contact us here.