Commercial property insurance is designed to cover loss of or damage to the physical property owned by a business. It covers damage caused by:
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Fire
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Wind
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Hail
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Smoke
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Lightning
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Explosions
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Theft
Unfortunately, most commercial property insurance policies do not cover water damage. Floods are covered under a separate policy called flood insurance that generally must be purchased separately.
This doesn’t mean that no water damage is covered under commercial property insurance, however.
Does Commercial Property Insurance Cover Burst Pipes?
In some cases, property insurance may cover burst pipes. This is the case only when the burst is sudden and unexpected. Water damage will not be covered if it’s caused by natural floods or negligence. If burst pipes are caused by normal wear and tear or negligence on behalf of the business owner, any damage caused will not be covered. Make sure to maintain proper upkeep when it comes to property owned by the business.
Other Common Exclusions
Along with flood and water damage, commercial property insurance also doesn’t often cover:
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Items in transport
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Vehicles
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Sewage issues
Thankfully, there are policies you can purchase to cover some of these issues. Damage to other people’s property is often covered under general liability insurance. General liability insurance provides compensation for bodily injury or property damage caused to someone else by the business’ everyday operations.
You can also purchase inland marine insurance to cover items and equipment that are being transported from one site to another, such as if the original building needs to be repaired after a disaster. Vehicle insurance often won’t cover equipment in the vehicle.
There are different types of property coverage, one of which is commercial auto insurance. Commercial auto insurance provides coverage for vehicles used and owned by the business. It provides a lot of the same coverages as a personal auto insurance policy, including physical damage and liability.
Any accidents involving sewage or plumbing generally aren’t covered by commercial property insurance. You can, however, purchase a sewer and water line insurance policy.
Do Property Policies Have To Be Purchased Separately?
Thankfully, you don’t necessarily have to purchase all these coverages individually. Commercial property insurance policies can be adjusted and expanded with many of the coverages above. You can even combine coverages under a comprehensive policy called a business owners policy (BOP) that often helps business owners save money.