1. Defining Commercial Property Assets
Commercial property policies cover two distinct asset classes: Building Property (the physical shell, permanent fixtures, HVAC systems) and Business Personal Property (BPP: machinery, raw inventory, computers, furniture, and tools).
2. The 80% Coinsurance Clause Warning
Most commercial property policies enforce an 80% or 90% coinsurance clause. If your building's true replacement cost is $2,000,000 and you only carry $1,000,000 in coverage, the insurer will penalize any partial claim proportionately.
Commercial property insurance covers company buildings, leased office build-outs, computers, machinery, and inventory. Just like residential policies, commercial policies can be written on an Actual Cash Value vs. Replacement Cost basis. Choosing ACV can trigger severe coinsurance penalties after a loss.
Audit your business risks with our Business Insurance Needs Checklist and understand bundled property protections in BOP: Business Owner's Policy Explained.
Check your commercial lease for property gap risks using our Coverage Gap Checker and review Glossary: Replacement Cost.
Compute total capital required to settle liabilities and sustain your family's standard of living.
