Property Insurance

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As the term itself says, a commercial property insurance policy helps people in business by covering their commercial property, against a myraid of losses or damages. In most of the 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, a 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 also required protecting their business against various potential contingencies like fire accident, burglary and many other perils which otherwise can affect them financially. A commercial property insurance come 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 which a small or medium-sized shop-owners may face.

Usually, a 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 of common perils like lightning, fire, civil commotion, etc.
  • Broad Policy: Along with basic perils, it covers other perils as well risks, like collapse, breakage of glass, water damage, sprinkler leakage, etc.
  • Special form Policy: It covers all types of risks except those which a 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 it is a brief guide on some of the perils which are covered under commercial property insurance policy=

Coverage AvailableInclusion
Business InterruptionIt includes all perils which are covered under standard fire and special peril insurance like fire, explosion, lightning, aircraft damage, etc.
Electronic EquipmentIt covers the breakdown of electrical equipments due to various reasons like short-circuiting, breaking of parts, etc.
MoneyIt covers loss of cash in transit, cash in safe
Accident of employeesIt covers the employees of the organisation against bodily injury, which may result in disability or death
Plate GlassIt covers accidental breakage of fixed plate glass
Fidelity GuaranteeIt 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 earthquake and terrorism as well. There are various insurance companies in India which are offering commercial 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 commercial 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 commercial property insurance policy rates, the insurer would consider how likely your business will file a claim. The greater the likelihood of claim, the higher your insurance premium would be. If a commercial property 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.


K.S Cloth has a flourishing business in Surat. Backed with the hard work and dedication of over 100 employees, the company runs various wellness programs for their workforce. Last year, the company also bought a commercial property insurance policy.

Read more: What is Contract Price Insurance Clause in Property Insurance?

Commercial 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 commercial property insurance policy not only extends to the building but it 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.