Protecting your business is no easy task. There are many different considerations business owners have as there are a ton of perils that can negatively affect your company. Texas is home to more than 473,000 small businesses which are responsible for nearly 4.8 million jobs alone. Business owners are responsible for maintaining the livelihoods of many and keeping your company financially sound is necessary for any endeavor.
Commercial property insurance helps you protect against the physical aspects of your business. From the building you operate out of to the tools and equipment you’ll need to complete orders, a commercial property policy will help you offset the costs of restoring your company’s property should you face a covered loss.
What Is Commercial Property Insurance?
It may go by many names such as business property insurance or commercial real estate insurance, but no matter what you call it, its purpose is to protect your property from harm. A commercial property policy will reimburse you for the money necessary to restore property damaged by a covered loss. This can include your company’s buildings, equipment, tools, personal belongings, inventory, and other physical assets belonging to your business.
How Much Does Commercial Property Insurance Cost?
In Texas, the average business owner will spend several hundred to even a couple of thousand dollars per year on commercial property insurance. Identifying an exact number is difficult for a number of reasons, however, because no two businesses or property risks are the same. The best way to estimate the amount you’ll pay for coverage is to shop your coverage among top-rated insurance providers and compare your company’s rates.
Commercial Property Liability Insurance Quote
We understand shopping through a variety of providers can be a time-consuming process, which is why we’ve streamlined it for you. Get a free, no-obligation commercial property insurance quote with only a few clicks of a button. Our tool can do the hard work for you and find an accurate quote for your coverage needs by searching through our many reputable insurance partners.
Is Commercial Property Insurance Required in Texas?
A commercial property insurance policy is not required by law in the state of Texas. If you are renting a property, however, the terms and conditions of your lease may require commercial property insurance as a requirement as a tenant. Furthermore, laws aside, you’ll want to protect your company from physical property loss with the right commercial real estate coverage. The loss of your building or equipment due to a peril such as a fire can interrupt operations and even shutter your business. Facing such financial hurdles alone can be detrimental to your company and investing in business insurance policies can help safeguard against such risks.
Commercial Property Insurance Coverages
Business owners in Texas have the following options for their commercial property insurance coverage policies:
- Basic Form Policies provide a basic form of coverage for your commercial property. Perils such as collisions involving aircraft and vehicles, civil commotion/riots, explosions, fires, leakage from sprinklers, lightning, sinkholes, smoke damage, vandalism, and volcanoes are all covered.
- Broad Form Policies will provide your property with the same protection as a basic form policy. In addition, your policy will also protect your commercial property from damage caused by the weight of ice/sleet/snow, falling objects, leaking appliances, and structural collapses.
- Special Form Policies are the strongest form of protection. Commercial property is protected from all perils that are not listed under your policy’s “exclusions”. Popular exclusions are infestations, earthquakes/earth movement, floods, general wear and tear, nuclear disaster, and war.
The more coverage you enroll in the better you’ll be protected, but expect to also pay higher premiums. Coverage needs will be different for each business and assessing your needs with a licensed agent will help you best determine a course of action.
Additional Coverages Supplementing Commercial Property Insurance
Like other forms of insurance, a commercial property policy isn’t blanket coverage. This means you could find yourself facing additional losses not covered by your policy. To avoid having to pay for costly repairs on your own, you should consider these additional options by assessing your needs with a trained professional. Learn more about some of the additional business coverages you have at your disposal as an owner to further protect your company:
- Commercial Auto Insurance- Necessary to protect vehicles used for business. A commercial property policy will cover equipment but not vehicles.
- Business Interruption Insurance- Physical damage can interrupt your business, however, your bills will continue. A business interruption policy will help you cover such costs, lost income, and potentially cover inventory depending on your coverage.
- Business Crime Insurance- Even though commercial property coverage can protect against theft and vandalism, policy limits do exist. A business crime insurance policy can help supplement your commercial property coverage for better protection against crimes.
Commercial Property Insurance Carriers
Businesses thrive on being able to deliver for their customers. Your company’s capability to execute its product or service and provide a quality experience while doing it is why you are successful. The same is true in the world of insurance. There are many brands available to Texans, but when choosing among commercial property insurance carriers, the importance lies not in a name, but rather the company’s ability to deliver. This is why we only work with A-rated or better insurance providers who are graded by independent assessors and graded worthy to deliver financial reimbursement on time for clients after a loss.
Commercial Property Insurance Water Damage
One of the most complex perils with property insurance involves water damage. Business owners are exposed to many different threats including HVAC leaks, roof damage that causes water to enter a structure, flooding, leaky equipment, and more. Not all water damage claims are covered by your policy, however, and understanding what is and what is not can be the difference between being prepared and being blindsided by a financial setback:
- Water damage claims that are of a sudden and accidental nature are covered by your policy. An example would be a leak in your roof causing water damage during a hailstorm, or a burst pipe that was in good condition beforehand.
- If you were to suffer from water damage due to general wear and tear, a lack of maintenance, or a defect, your claim is unlikely to be covered.
- Additionally, flooding is not covered by a commercial property insurance policy. While this can be frustrating for business owners, there are flood-specific policies that can supplement this coverage gap and provide protection against such events.
Where To Buy Commercial Property Insurance in Texas
The best place to buy commercial property insurance in Texas is with the agency that saves you the most money. Keeping your cost low is important in every aspect of business and gaining insurance is no different. Of course, you also don’t want to cut your coverage to save a few bucks today when it might cost you a consequential amount down the road. Freedom Insurance Group helps businesses find the protection they need to overcome potential risks, all at the most affordable price available.
Our agents can do this because we’ve partnered with 25+ top-rated insurance companies. Since 2005, we’ve been helping Texas-based businesses, big or small, protect themselves with affordable insurance products. On average, clients switching to Freedom Insurance Group save around 40% on their premiums. Get a quote or contact us today to discover your options for commercial property insurance and more!
Commercial Property Insurance FAQs
Do you have a question about commercial property insurance?
We’re here for you!
Our team of experts is more than happy to help you navigate the world of business insurance. Feel free to contact one of our agents at any time. However, here at Freedom Insurance Group, we understand that some questions are more common than others. You can’t beat the one on one advice from a licensed agent. Each company is different and for a specific coverage need, we always recommend giving us a call, but our FAQs below are a great guide to help you get started. Learn more about some of the most common obstacles business owners such as yourself are facing by reviewing some of the questions we receive the most below:
The best way to determine the amount of coverage you’ll need is to speak with a licensed insurance agent about your specific needs. A commercial property insurance policy should be enough to cover your business’s costs of fully restoring a significant loss to your businesses in regards to your policy’s covered perils.
For example, if you were to suffer from a fire, you wouldn’t want to purchase enough coverage to restore half of the value of your building, you’d need to purchase enough in the event the fire was to completely destroy your place of business. If you have three pieces of heavy machinery but only two are covered, you’ll likely face hardships in the aftermath of a major loss or be forced to pay for the restoration of the third machine out of pocket to avoid order disruptions. Whatever industry you’re in, be sure you are enrolled in a policy with significant coverage that can help you overcome the unimaginable.
The way your commercial property insurance policy is calculated is by your insurance provider assessing the various risk factors that come into play while insuring your business. Some common factors include:
- Where your business is located.
- The type of business you operate.
- The amount of commercial property coverage you’ll need.
- Your company’s claims history.
- The size of your business.
- The age and type of equipment you are protecting with your coverage.
- The age of the property you are insuring.
- Fire and theft prevention methods.
- And more.
These factors go into calculating your premium for a number of reasons. A larger company will have more to cover and therefore will likely pay more. If your business is in an area prone to powerful weather events or theft, you can also expect to spend more on protection. Conversely, if your business has extra security measures and a low amount of previous claims, your premium will likely be lower as a result, and so forth.
Each insurance company may assess these factors, but the method of doing so will vary from brand to brand. The methodologies and algorithms to determine risk and create an insurance rate are different for each insurance provider which results in a variety of rates for your coverage. Different businesses, even within the same industry, will find themselves paying different rates due to these discrepancies which is why it is important to compare your rates among various insurance brands.
Commercial property insurance covers property including personal belongings, equipment, your building (even if it is leased), tools, and other physical assets which are used to operate your business. Note, an exception here is your company’s vehicles. You’ll need to acquire a commercial auto insurance policy for any vehicles used for your business.
There is a variety of reasons the premiums of commercial property insurance policies continue to rise. Insurance providers assess risk when insuring a business. While there are many different variables, the general rule of thumb is, if there is more risk, the rates will be higher for that business. If your business has less risk, the premium rate will be lower.
Damage from natural disasters is one of the most common claims a business can file. They are also some of the most costly. Consider the damage from a hurricane or hailstorm or fire that your business would endure. The cost to rebuild can be substantial even for small acts of nature. Over the last several years, the United States has seen an uptick in devastating weather events. Texas alone has been subjected to destructive hurricanes, floods, hail storms, winter storms, and wildfires. These extreme weather patterns have caused expensive claims from policyholders causing billions of dollars in damages. The result would have insurance companies raising rates to cover these growing expenses.
The costs of rebuilding and replacing physical structures and equipment are also rising. These increases are due to a number of reasons including supply chain issues, the demand for building materials, inflation, and the general cost of labor going up. Commercial property insurance may be rising, but the cost of your policy pales compared to facing such losses alone. By comparing your rate among a variety of insurance providers, you can find the lowest rate for your protection to protect your future without overpaying.
A general liability insurance policy will pay for the property damage caused by you or an employee to another party’s property, however, to protect your property, you’ll need a commercial property insurance policy.