As the term itself says, a commercial property insurance policy helps people in business by covering their commercial property, against a myriad of losses or damages. In most cases, a commercial property insurance policy offers coverage for standard fire & special perils and burglary. As the cases of burglary in business premises are increasing with time, commercial property insurance offers cover against the loss or damage in the business premises due to burglary.
As companies are growing both in size and revenue, they are also required to protect their business against various potential contingencies like fire accidents, burglary, and many other perils which otherwise can affect them financially. Commercial property insurance comes as a boon here.
A number of insurance companies in India are also offering commercial insurance policies to people owning small or medium-sized shops. The policy offers coverage for risks and contingencies that small or medium-sized shop owners may face.
Usually, commercial property insurance covers numerous risks, and on the basis of their coverage, it is feasible to divide the policy under the following categories=
- Basic Policy: It comprises common perils like lightning, fire, civil commotion, etc.
- Broad Policy: Along with basic perils, it covers other perils as well as risks, like collapse, breakage of glass, water damage, sprinkler leakage, etc.
- Special form Policy: It covers all types of risks except those that commercial property insurance specifically excludes from the insurance document. Some of the events which are not covered under the policy are terrorism, war, wear & tear, nuclear disaster, consequential losses, nuclear perils, fines or penalties, etc.
Here is a brief guide on some of the perils which are covered under commercial property insurance policy=
| Coverage Available | Inclusion |
| Business Interruption | It includes all perils which are covered under standard fire and special peril insurance like fire, explosion, lightning, aircraft damage, etc. |
| Electronic Equipment | It covers the breakdown of electrical equipment due to various reasons like short-circuiting, breaking of parts, etc. |
| Money | It covers loss of cash in transit, cash in safe |
| Accident of employees | It covers the employees of the organization against bodily injury, which may result in disability or death |
| Plate Glass | It covers accidental breakage of fixed plate glass |
| Fidelity Guarantee | It covers loss of money or goods which happen due to fraud or dishonesty of employees |
By paying additional premiums, it is feasible to get coverage for earthquakes and terrorism as well. There are various insurance companies in India which are offering property insurance policies. Therefore, while choosing a commercial property insurance policy, make sure to consider the following points=
- Inclusion/Exclusion of a commercial property insurance policy
- Clauses in the property insurance policy
- Claim settlement ratio of the insurer,e., how many claims it has settled in previous years
- Claim settlement process
In order to calculate your insurance policy rates. The insurer would consider how likely your business will file a claim. The greater the likelihood of a claim, the higher your insurance premium would be. If a commercial insurance company determines that your business is at a high risk of loss. It may either raise premium rates or decline to issue you a policy.
Case
K.S Cloth has a flourishing business in Surat. Backed by the hard work and dedication of over 100 employees, the company runs various wellness programs for its workforce. Last year, the company also bought a commercial property insurance policy.
Read more: What is Contract Price Insurance Clause in Property Insurance?
Property insurance offers protection to the business against potential contingencies. Like fire, burglary, earthquake, and various other damages which otherwise could hamper their financial health.
The scope of the commercial property insurance policy not only extends to the building but also covers the content of K.S Cloth’s office as well. Along with this, the insurance policy promises to cover the loss of income suffered by the company, which may happen due to business interruption and losses caused by theft, fraud, or dishonesty of its employees.
