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Imagine facing a fire or break-in at your Central New York business. The damage and loss can be devastating, both financially and emotionally. Having the right insurance in place can be the difference between getting back on your feet quickly or facing an uphill battle.
But navigating the complexities of commercial property and business personal property insurance can feel overwhelming.
At the Horan insurance agency, we understand the unique challenges faced by Central New York businesses. We’ve seen firsthand the confusion and frustration that can arise when it comes to property coverage. That’s why we’re here to help you gain clarity and make informed decisions to protect your valuable assets.
This article will guide you through the key distinctions between commercial property and business personal property insurance. We’ll explore real-world scenarios and delve into specific solutions.
What Commercial Property Insurance Covers and What It Doesn’t
Commercial property insurance covers the building and anything that is attached to it. This includes things like walls, floors, ceilings, windows, doors, plumbing, wiring, and so on. It also includes things that are fixed or secured to the building, such as ovens, fryers, lifts, and other equipment.
Business personal property insurance covers the contents and equipment that are not part of the building. This includes things like furniture, inventory, computers, tools, and so on. It also includes things that are movable or portable, such as laptops, phones, cameras, and other devices.
The type of insurance you need depends on two factors:
- what kind of assets you have and
- who owns or is responsible for the building.
For example, if you run a pizza place in Central Square, you might have ovens and fryers. These items are cheaper to insure as commercial property if they belong to the building or if you have a contract that requires you to insure them.
Otherwise, you would need business personal property insurance, which has a higher rate than commercial property insurance.
If you don’t own or have to insure the building, you can’t just cover those items as commercial property. That’s because you need to insure at least 80 percent of the value of the whole structure to get full coverage. If you don’t, you’ll only get an actual cash value settlement, which is not very favorable.
That’s why it’s hard to insure items that aren’t part of the building, but are too expensive or cumbersome to be covered by business personal property insurance.
How Business Personal Property Insurance Works and When You Need It
Business personal property insurance covers the contents and equipment that are not part of the building. You need this type of insurance if you don’t own or have to insure the building, or if you have assets that are not attached or secured to the structure.
Some examples of businesses that need this type of insurance are:
- Mechanics who have lifts and other equipment. If they don’t own or insure the garage, they need business personal property insurance for these items. These items are too large and heavy to be easily stolen, so they’re considered part of the structure if they own or insure the garage.
- Restaurants and bars that have installed flooring, bar, shelves, plumbing, sinks, mirrors, and so on. They also have a lot of kitchen equipment, like ovens, fryers, freezers, and refrigerators. These are not just plates, tables, chairs, and linens. These are valuable assets that they need to protect. But they don’t want to pay high rates for business personal property insurance if they rent the place and add things to it.
A solution for these businesses is to cover some of these items under the tenants improvements and betterments insurance. This way, they can get a lower rate than business personal property insurance. Tenants improvements and betterments insurance covers the items they’ve improved or added to the rented place.
So What Are the Main Difference Between Commercial Property and Business Personal Property Insurance?
To sum up, the main difference between the two types of insurance is what they cover.
- Commercial property insurance covers the building and anything that is attached to it.
- Business personal property insurance covers the contents and equipment that are not part of the building.
The type of insurance you need depends on who owns or is responsible for the building. But some things are always considered business personal property, no matter what.
For example, you can’t insure your inventory as part of the building. You can only insure the shelves that hold the inventory, if the shelves are fixed to the building.
Horan Can Help You Choose the Right Type of Insurance for Your Business
Running a CNY business comes with inherent risks. By understanding the distinctions between commercial property and business personal property insurance, you can make informed decisions to safeguard your assets and ensure your business continues to thrive.
At Horan, we’re committed to empowering Central New York businesses with the knowledge and guidance they need to navigate the complexities of insurance. We believe a clear understanding of your coverage options translates to composure and security, allowing you to focus on what matters most: running a successful operation.
Don’t let navigating insurance become another burden on your entrepreneurial journey. Click the Get a Quote button below, and let’s work together to ensure your business is protected against the unexpected.
