There’s no good time or place for a fire, but a fire at your place of business can be especially costly. In many cases the costs associated with the physical damages and restoration take a backseat to the costs of the interruption to business activities. Income can very quickly slow to a trickle or stop completely if you’re unable to occupy your physical location, and that’s why it’s so important to understand the types of coverages available and to adequately insure your business.
Begin by understanding the differences between the two main types of business coverage: commercial property and commercial casualty.
As the name would imply, commercial property insurance covers the structure itself and the equipment in it, and it pays for replacement and repair costs for both. Calculating the risk levels here and appropriately insuring physical property exposures is fairly straightforward. One important note, however, is to remember to reassess that coverage as new equipment is added. From computers to manufacturing equipment, newer models will usually carry a higher value than older ones, and it’s vital to make sure your coverage keeps up.
The other side of business coverage is commercial casualty insurance, and this can be more complex. Commercial casualty is designed to insulate your business from loss of revenue in the aftermath of a fire. Ensuring adequate coverage here involves a careful look at a number of “what if” scenarios: in an office setting, employees might be able to work remotely while repairs are completed, minimizing loss of income. A manufacturer, however, might be sidelined completely by the inability to occupy their plant.
Chances are good that there are both potential exposures and potential solutions you haven’t considered. That’s why it’s important to review your specific situation with your insurance professional on a regular basis.
Many businesses are able to realize substantial savings on their commercial premiums by installing sprinkler alarm systems. This is an investment that can easily repay its cost in premium reductions, but taking full advantage of those savings requires a thorough inspection of the system by the Insurance Services Office (ISO).
Questions about commercial insurance coverage? Contact Consolidated Insurance.