Posted on May 17, 2014
When companies do not own their business building and instead lease their office or retail location, they must consider purchasing renters insurance to fully protect their business from potential loss, theft or damage.
Because landlord property insurance policies do not generally cover their tenant?s goods, business property insurance for tenants was designed to protect companies who lease space. Besides covering furniture, equipment, computers and inventory, business owners will also want to investigate additional boiler and maintenance coverage. Often, landlords will only supply insurance coverage for basic equipment such as air conditioning, but machines used by the business would not be protected.
Some business renter?s insurance policies will combine multiple insurance coverages within affordable packages. The coverage includes liability, property and equipment insurance. These three policies provide comprehensive coverage most useful to business tenants.
Determining coverage will be based on total assets kept on premises, number of employees and certain locational risks. If business premises are situated in flood zone or high risk wild fire area, then additional coverage for flooding or fire would also need to be purchased. Once the types of coverage are chosen, then the amount of coverage needs to be considered.
Business owners will want to assess how much it would cost to replace their possessions should they be damaged beyond repair. Companies must also choose whether they want replacement cost or actual cash value. With the replacement basis, the insurance company would pay to replace the property at today?s values while actual cost basis would pay based on value less any depreciation. Commercial property insurance is also subject to deductibles so policy owners can determine the right amount for their budgets ? usually the higher the deductible, the lower the insurance premiums.