As a real estate litigation lawyer knows well, business owners face a lot of potential liabilities and need to protect their investment and business. Insurance is critical protection because it’s just a matter of time before you suffer a loss that could harm, if not cripple, your company. Insurance is an investment that helps you manage risks.
What Is Commercial Property Insurance?
It’s a contract between your business and an insurance carrier. It states how you’ll be compensated if your physical assets are destroyed, damaged, or stolen due to an event covered by your policy. It’s often bundled with general liability and business interruption insurance as part of your business owner’s policy. If you rent or lease your location or equipment, you need not insure it. The owner should cover that.
What Does It Cover?
The carrier will pay you (less the deductible) to repair or replace your business property if it’s damaged or destroyed by a problem covered by your policy, like theft or fire. Your policy limits on how much it’ll pay for covered losses. It may not be enough if you’re dealing with catastrophic losses.
You may have a “named perils policy” that only covers specific risks or an “open perils policy” that offers wider protection and lists risks that aren’t covered (like flood damage).
As our friends at Focus Law LA can explain, the risks usually covered by commercial property insurance include:
- Fire
- Lightning
- Wind
- Theft
- Vandalism
The types of assets covered by this insurance typically include:
- Building
- Business records
- Computers
- Equipment
- Furniture
- Inventory
- Outdoor fixtures
- Personal property
- Supplies
- Tools
If your business owns vehicles and employs drivers, you will need separate coverage for them.
How Can I Improve My Chances My Claim Will Be Covered?
There are things you can do and avoid doing that will help you with your claim, including the following:
- Document the damage and the cause, if possible. Shoot photos and videos. Take notes of what happened, when, how, and what others have said about the incident
- Document your communications with your carrier. Don’t delete text messages or emails to or from the company. If you speak to someone, write down their name, what they said, what you told them, and the date and time of the conversation. If the claims process goes sideways and your claim is rejected or they offer far less than you need, this evidence may help you with the internal appeals process or if legal action is required
- Be truthful with the claims adjuster, but pretend you’re in police custody. Everything you say can and will be used against you. Don’t stray off into topics you’re not sure about or speculate about causes that will get your claim denied or reduced
- Most policies require you to mitigate (or take action to reduce) any damages. Take that seriously and ask your carrier for help
- If a crime was involved, call the police and file a report. This can be vandalized or stolen property, whether potential suspects are employees, contractors, customers, or strangers
- File your claim when you get basic information. You need not wait until you’ve documented everything and have a pile of invoices ready to go
Talk to your attorney if you have questions about the claims process or feel your carrier is not meeting its obligations.