Property & equipment

Commercial Property Insurance

Insurance for your building, equipment and inventory after a fire, storm, theft or other insured loss, with options for the income you could lose while you recover.

Request a commercial property quote Upload your current policy

Commercial property insurance protects the physical things your business depends on: a building you own or must insure under a lease, and your furniture, equipment and inventory. Many policies can also add business income coverage for the money you could lose while you repair or rebuild.

Two choices shape how a property claim is paid: the causes of loss form (the events the policy insures) and how your property is valued. Realistic values, kept up to date, help you avoid an underinsured loss or a coinsurance penalty.

Flood and earthquake are usually excluded and handled separately. Location matters here: in New Jersey, for example, many properties near the coast or rivers deserve a closer look at flood options. Whether you have one storefront or buildings in several states, we'll review your lease, lender requirements and building details with you before you choose limits.

Coinsurance, agreed value and blanket limits

Coinsurance is a policy condition that expects you to insure property to a set percentage of its value, often 80% or 90%. If you carry less and have a partial loss, the claim payment can be reduced in proportion.

Agreed value is an option on many policies. You provide a signed statement of values, and the coinsurance condition is suspended for the period shown on the policy.

Blanket limits spread one limit across several buildings, locations or types of property instead of setting a separate limit for each. That flexibility can help after a large loss at one location, but a blanket limit doesn't remove coinsurance by itself. Many blanket policies still require a coinsurance percentage or agreed value, usually supported by a statement of values.

What's typically included

Exact coverage depends on the policy form, endorsements and insurance company.

Building

The structure, permanently installed fixtures and, on many forms, building equipment and materials used for repairs, as described in the policy.

Business personal property

Furniture, equipment, inventory, supplies, and improvements and betterments you paid for in a leased space.

Business income and extra expense

Included on some policies and added to others. It can pay lost net income and continuing expenses, plus extra costs to keep operating, while you recover from physical damage caused by an insured cause of loss. Limits, waiting periods and time limits vary.

Causes of loss: basic, broad or special

Basic and broad forms list specific perils (causes of loss) such as fire, windstorm and vandalism. Special form typically insures direct physical loss unless the cause is excluded or limited.

Ordinance or law

Costs to demolish undamaged portions and rebuild to current codes, plus the lost value of the undamaged part. Standard forms often limit this unless it is added by endorsement (a change added to the policy).

Equipment breakdown

Sudden mechanical or electrical breakdown of equipment such as HVAC, boilers, refrigeration, electrical panels and production machinery. It is usually added by endorsement or a separate policy, and wear and tear is commonly excluded.

Optional extensions

Spoilage, utility service interruption, outdoor signs, sewer or drain backup and valuable papers, available as extensions or endorsements depending on the insurance company.

What to watch for

Coinsurance: if limits are too low relative to the property's value, a partial loss can be paid proportionally less. Agreed value, where available, can suspend this condition.
Actual cash value settlement, which deducts depreciation, when you expected replacement cost.
Flood and earthquake, which are usually excluded and need separate policies or endorsements.
Business income limits or restoration periods that are too short for a realistic rebuild, or no business income coverage at all.
Vacancy conditions that can restrict or reduce coverage once a building has been vacant beyond a set period, often 60 days.
Percentage wind or hail deductibles and protective safeguard requirements for sprinklers or alarms.

What affects price and eligibility

Construction type, age and updates to the roof, wiring, plumbing and HVAC
Occupancy and the operations that take place in the building
Fire protection, including sprinklers, alarms and distance to a hydrant and fire station
Location, including flood zone and coastal wind exposure
Values, deductibles and valuation basis (replacement cost or actual cash value)
Prior property claims

Helpful information for a quote

Have what you can — we'll ask for anything else an insurance company needs. Starting a new business? You can begin without prior policies or loss runs.

Building address, construction type, year built, square footage and number of stories
Years of roof, electrical, plumbing and HVAC updates
Estimated building, contents and business income values
Lease or lender insurance requirements
Current declarations page (the policy summary) and loss runs (claims history reports) for the last 3–5 years, if you've been insured before
Sprinkler, alarm and security details, and any recent appraisal if you have one

Written by ALP Insurance

Who typically needs it

Business owners who own their building or must insure improvements under a lease
Landlords and real estate investors with commercial or mixed-use properties
Manufacturers and wholesalers with machinery, raw materials and inventory
Restaurants and retailers with equipment, fixtures and stock
Contractors with an office, shop or yard
Businesses whose lender requires property insurance on the building or equipment

Talk it through with an agent

Not sure what you need? Start a request and choose "Not sure" — a licensed ALP agent will talk through the options with you.

Request a commercial property quote

Industry guides

Commercial Property FAQs

How can coinsurance reduce a claim?

Say a building worth $1,000,000 has an 80% coinsurance condition, so the policy expects a limit of at least $800,000. If you carry $600,000, a partial loss could be paid at about 75% of the loss, minus the deductible. The exact calculation depends on the policy.

Should I choose replacement cost or actual cash value?

Replacement cost typically pays to repair or replace with new property of like kind and quality, while actual cash value deducts depreciation. Replacement cost usually costs more but can leave you in a much stronger position after a loss.

How much business income coverage do I need?

It depends on how long it could realistically take to repair, rebuild and reopen, and on your income and continuing expenses during that time. Many policies also apply a waiting period before income loss is paid, so we can walk through a business income worksheet with you.

Does commercial property insurance include flood?

Typically not. Flood is usually excluded and handled through a separate flood policy or, in some cases, an endorsement, so ask us about the flood zone and options for your location.

I lease my space. Do I need commercial property insurance?

Usually, yes, for your contents, equipment and any improvements you paid for. Many leases also require tenants to insure certain building items or carry business income, so the lease should be reviewed.

What is ordinance or law coverage?

When an older building is damaged, local codes may require upgrades or demolition of undamaged parts. Ordinance or law coverage can help pay those costs, which standard forms often limit or exclude.