Why do you need Commercial Property Insurance?

Mr. Kishan Singh owns a textile business in Vadodara and has rented an office in a commercial building for technical operations. Adjacent to it is a Tiffin service office where fresh food is cooked and delivered to the employees. Once, due to the negligence of the workers in the adjacent office, the fire erupted and spread to Mr. Singh’s office as well. Several of his employees were injured and the furniture, fittings and machines were also highly damaged. Although with all the safety precautions installed, Mr. Singh became liable to pay the hospital bills of his injured employees and he had to get the whole office repaired and renovated. He sued the owner of the Tiffin Office. Luckily, he had a Commercial Property Insurance plan which he used to reimburse the estimated loss in his office. He realised that without this insurance plan, he would have never got the justice that he sought. The owner of the building also received the estimated loss to the building and the inner fittings through his commercial insurance plan!

The above example proves the great importance of a commercial property insurance plan which is the first thing that any commercial property owner/business owner/renter of commercial property must avail. This plan does for businesses what property insurance does for the consumers or homeowners/renters. It covers the cost of any damage or destruction to the building, furniture, fittings, stocks, and important documents. In today’s competitive world, this policy is a must as it will protect the place that is the sole source of income for many! With rising property rates and several risks attached to various businesses, even those who rent such places must make it a point to avail this security plan.

Scope of the policy:

Let’s look at the perils covered under the commercial property insurance to be fully aware of why one must avail it positively and secure one’s commercial space/office/building from unexpected dangers:

  1. Burglary and Theft

Commercial world is becoming more dangerous these days with rising competition. Even with ample safety measures, you cannot be sure of whether your office is safe at night or during holidays! What if a rival plan to get your office attacked and steal important deal documents? What if some burglars break into your office and shatter all the furniture and machines leaving you helpless and the office non-functional?

You might have secured your office with locks and passwords, but such cases still happen. Even security guards cannot protect you and your office completely. In such a case, you need to avail a commercial property insurance to reimburse you of the financial loss and pay for the repairing and replacement of inner fittings.

  1. Collision with vehicles/airplanes

As said in the above point, safety precautions might always be less! Imagine a wild animal or a group of stray dogs fighting and breaking the outer fencing of your commercial building! This is the most common thing that can happen. The uncommon ones like a vehicle or an airplane colliding into your building or where you have let off an office on rent can destroy the whole building! It can destroy the sole source of income which might not be easy to set up again altogether!

Instead, secure yourself by paying a minimal premium on a commercial property insurance policy!

  1. Natural calamities like floods

Imagine that you own an electric repair shop in a low-lying area of Old Delhi. Due to heavy rains for continuous five days and a poor drainage system, the water enters into your shop and some of the electronic items are damaged beyond repair. These items belonged to valuable customers to whom you will have to pay for the loss as well. Being a small shop owner, will you have the financial strength to bear all the expenses yourself? Will you be able to replace some important files that were damaged due to seeping water? The answer is NO! It is better to avail an insurance policy to secure your small business rather than losing it all to a natural force like flood or earthquake!

  1. Third-party liability

It is not always that one can never be at fault! Even though you might have taken the precautionary measures, any minor mistake on the part of your workers can harm a third-party in the office premises. What if the injury to the third-party is quite huge and expensive? Such unexpected mishaps are also covered under this policy!

While you might have now realised about the incredible significance of this plan, it is necessary to be aware of certain exclusions to the policy which might include:

  • Cost of excavations, grading and backfilling
  • Underground pipes and drains
  • Land and foundation of building structures
  • Animals
  • Accounting, bills and currency
  • Electronic data

Some of the exclusions can still be covered through payment of higher premium. So, thoroughly check the policy wordings, avail add-on covers as required and secure yourself and your business during emergency situations.
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