The Necessary Evil of Commercial Space Insurance

The Necessary Evil of Commercial Space Insurance

Commercial space insurance one investment that after you send the check out, you hope to never have to see any of that money again. It is a necessary business expense. Through the course of business, no matter your industry, there are things that could go wrong and devastate your company. Fire, natural disasters, accidents, water damage, litigation and theft, are all examples that can hurt your business. Businesses who think commercial space insurance might not be necessary are leaving themselves vulnerable to these very expensive vicissitudes of life.

What You Need to Know About Commercial Space Insurance

Commercial space insurance comes in a wide variety. Most businesses are required to carry three or four different basic types of insurance;

  • Commercial property insurance
  • General liability insurance
  • Worker’s compensation insurance
  • Auto liability insurance

Since worker’s compensation insurance and auto liability insurance are more industry and state specific we will not be discussing them any further. As you are searching out leases or commercial real estate property, commercial space insurance should be something you consider along the way.

Commercial Property Insurance

Commercial property insurance is definitely a necessity for any business. In many cases landlords and banks require commercial property insurance and general liability insurance in order to lease a property or have access to financing. Commercial property insurance is a type of commercial space insurance that covers a business of damage or loss to the business property. A good commercial property insurance should cover property fixtures, machinery and equipment, computers and accessories, inventory and supplies, office furniture, and any personal property kept at the business site.

Even under the more expensive commercial property insurance categories the risk of theft is rarely covered.

Liability Insurance

If you want to protect your backside and bottom line you are going to need liability insurance. Liability insurance is also a key commercial space insurance that banks and landlords look for before leasing or providing financing to a business.

When there is a victim in an accident, they will often seek compensation for damages and/or pain and suffering. In many cases there is no cap on these potential damages. One lawsuit could cripple a business. Liability insurance protects against this kind of situation from happening.

There are a few different kinds of liability insurance. They include general liability insurance, product liability insurance, professional liability insurance and auto liability insurance. The most important one to know about is general liability insurance which protects your business against legal claims for bodily injuries, accidents, personal injury (libel or slander), damage to others’ property, costs of defending lawsuits, false or misleading advertisements, and settlement bonds or judgments. Something as simple as a slip and fall by even a trespasser could result in a business closing its doors if it didn’t have general liability insurance. It is one of the most important insurances to consider when looking at commercial space insurance.

The other types of liability insurances mentioned above are more industry specific so we won’t go into too much detail. Product liability insurance is based on protecting a business that manufactures, distributes or retails any kind of product that could result in a financial loss resulting from a defect that causes injury or bodily harm. Professional liability insurance, also called errors and omissions insurance protects businesses from litigation such as malpractice, errors or negligence. Auto liability insurance has to do with claims regarding company vehicles and any accidents related.

Liability insurance will protect a business from things that happen on the property during the course of work, making it an imperative piece in commercial space insurance.

Getting Commercial Space Insurance

Just like looking to buy or lease commercial property the best way to find commercial space insurance is to do a little research. There are two main types of insurance middleman that your company can seek out for advice on commercial space insurance, brokers and agents. Traditionally, agents represent insurance companies while brokers represent businesses. Today the lines are becoming murky in the differentiation but a little research can go a long way. Company owners should ask friends to refer good insurance brokers or agents. Trade organization websites often have good information on insurances needed in specific industries.

For many new companies the initial emergence in the market makes them hesitant to make the investment in commercial space insurance. But, how many times do you actually save in the long-run cutting corners? One unlikely lawsuit or natural disaster could be the end of your business.

Although we can’t provide you with commercial space insurance at S&D Realty we can find you that commercial space on long island that you are looking for. One of the strengths of S&D Realty is our ability to evaluate real estate in terms of highest and best use, feasibility and investment performance. For more information on investing in commercial real estate, don’t hesitate to give us a call at 516-248-6905. We look forward to hearing from you!

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