A Guide to Commercial Real Estate Insurance for Your Business

In most major markets, commercial real estate leases in heavily-trafficked neighborhoods can explode a company’s monthly overhead. Besides the cost of the space itself, you may be on the hook for utilities, shared common area costs, security, supplies, and staff. But one cost that’s easily overlooked may be the most important: commercial property insurance.

For those in manufacturing, retail, and non-profits, this is a critical aspect in protecting your business from unforeseen accidents and incidents. While each industry (and the accompanying assets associated with each business) demand different costs for commercial property insurance, it’s important not to overlook this facet of commercial real estate leases. And as with auto or home insurance, it doesn’t hurt to shop around before securing a policy. 

Before you start your search for a suitable commercial property insurance policy, you should inform yourself with the ins and outs to ensure you know what to expect from your specific business requirements and to protect your company from undue burden.

Explaining the Basics of Commercial Property Insurance 

As with residential insurance, commercial property insurance covers a wide variety of danger and accidents, but it’s not a blanket protection. Most commercial property insurance policies cover common accidents, like theft, water damage, natural disasters, vandalism, and fires, but most importantly, these policies insure your property and resources within the building itself. In addition, they protect property your customers and employees bring into the store, signage, and branding items located within. However, it doesn’t protect you against lawsuits, so business owners should invest in general liability insurance to protect yourself against expensive legal fees related to your business. 

Who Should Secure Commercial Property Insurance?

Any business with a physical location should invest in commercial property insurance to protect the building itself, but even those who own their business and work from a home office should purchase commercial property insurance as well. 

Whether you have a commercial real estate lease or own the building outright (or are paying a mortgage), you’ll need commercial property insurance to cover the building. If you’re renting the property, the owner will transfer liability to you based on the square footage included in the lease. Before you can even sign a commercial real estate lease, you need to provide proof of commercial property insurance showing coverage amounts and the scope of the policy. 

Breaking Down Costs and Benefits

Depending on the value of your assets, including specialized equipment, computer systems, furniture, etc., your annual rate for commercial property insurance will differ. However, small businesses, such as coffee shops, boutique clothing stores, and bookstores, can expect to pay between $500-1000 per year. These rates are based on the construction materials of the building, distance to a local fire department station, and the nature of the business. Also, like residential property insurance, the rates will differ based on the value of the property and its contents- the larger your business, square footage, and the more valuable your assets, the higher your deductible will be.

To protect against accidental fires, water damage, flooding, and other natural disasters as well as man-made damages like vandalism and theft, commercial property insurance is an essential – and sometimes mandatory, as stated above – aspect of owning and operating a business of any size or scope. 

What’s Lessors Risk Insurance – and Why Does it Matter?

Lessors risk insurance is only applicable for building owners who maintain a minority of the property’s square footage and sublease the remaining area to other occupants. While building owners require commercial property insurance from tenants, lessors risk policies are an essential component of owning and operating a commercial building. These policies are less expensive than commercial property insurance, but still insure the property and its assets. 

What to Keep in Mind When Shopping for Commercial Property Insurance

As previously mentioned, commercial property insurance only covers certain aspects in the insurance world and shouldn’t be used as a blanket protection. If you’re about to start a business or open your first physical location, keep the following additional policies in mind to maximize your protection going forward:

Property Insurance

Whether you own the building you occupy or are leasing a space, you likely own several thousand dollars worth of business property, including computer systems, tools, equipment, and inventory to ensure continuity of business. Property insurance protects these assets against fires, theft, and other forms of damage. Optional features of these types of policies may also cover the loss of earnings as a result of incidents – which should be strongly considered by those seeking commercial property insurance policies. 

General Liability Insurance

This is the most basic and essential insurance policy in the commercial world, offering protections against damages and legal fees related to bodily harm or property damage to a third party on or off your company’s physical territory. General liability insurance is a crucial addition to commercial property insurance and should not be overlooked when considering a new facility for your company. 

Commercial Auto Insurance

For any company with vehicles under its name for employee use, commercial auto insurance is essential. Any vehicle that transports employees, assets, or proprietary information should be insured under these policies to protect against theft, accidents, and acts of God. Even if your company compensates employees for mileage and gasoline for their personal vehicles during business hours, you should invest in non-owned auto liability insurance in the event that an employee doesn’t have adequate insurance in the event of an incident. 

Business Owner’s Policies

These policies, otherwise known as BOPs, offer a bundle of business-related insurance policies, including business interruption, commercial auto, liability, crime/theft, and property insurance. Your rate will depend on your needs, but these are packaged to ensure business owners receive the best rate without having to invest in multiple policies from different providers. 

Professional Liability Insurance 

A professional liability insurance policy protects the company against any failure to render professional services – and isn’t included in a general liability insurance policy. Lawyers, accountants, consultants, and any other professional services provider should invest in this type of policy in addition to commercial property insurance. 

Data and Computer Systems Insurance

When a company collects privileged data, it has a legal responsibility to protect it. Should a data breach occur, this type of insurance would protect the company against damages and legal costs associated with any data loss, breach, or accidental disclosure of such information. 

Directors and Officers Insurance

This policy type protects employees at the highest levels of the company – C-level employees – against actions that could affect the profits of the company itself. Should their performance or actions while employed by the company demonstrate a legal risk or expose the company to a lawsuit, this policy would protect the company against damages and cover legal costs. 

No matter where you decide to set up shop, it’s important to factor in the costs of insuring your commercial real estate lease and property in order to protect your company from accidents, theft, and lawsuits – no matter your industry or area of focus.

Tax Season is Upon Us. Are Your Books in Order?

If not, you’re in luck! We’ve partnered with Bench to help connect tenants with better tools to run their business. OfficeSpace.com users can now get a free one-month trial and an additional 20% off the first 6 months of bookkeeping. 

If you feel behind on your bookkeeping you’re not alone. Most entrepreneurs struggle to keep up with their books throughout the year. That adds a lot of stress come tax season, but it also makes it a lot harder to uncover ever tax deduction you deserve.

That’s why we’ve partnered with Bench to offer business owners (tenants) with an easier solution – and at a discounted price. OfficeSpace.com visitors Bench provides a seamless way to manage tax season, as well as your finances throughout the year.

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Listings Spotlight: 7 Spaces That Will Give You Serious Office Envy

Thousands of listings get added to OfficeSpace.com daily, and we get the pleasure of seeing cool office space photos from all over the country. So naturally we thought: why not spread the office envy? This week’s round up features industrial columns, exposed brick walls, bright red accent walls and so much more! Whether you’re in the market for a new space or simply looking for some workplace design tips, these offices are bound to spur inspiration.

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What to Consider When Moving Into A New (Or Your First) Office [Infographic]

Infographic of What to Consider When Moving Into A New (Or Your First) Office

Moving into a new office can be a challenge both logistically and energetically. Finding an office that suits your business needs is only the first part of the process — moving in and readjusting to the new space can take some effort as well.

By having a detailed checklist of factors relating to your relocation, you can save yourself a lot of the hassle that can come up with new moves, especially if this is your first office.

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Market Zoom: 10 Big Phoenix Office Deals That Closed in 2018 (So Far)

Office deals in Phoenix in the first quarter of 2018 were white hot, with a number of large sales and leases taking place. According to CBRE, the net absorption in the Phoenix office market reached 154,716 square feet with nearly 1.3 million square feet of gross absorption. 

Let’s take a closer look at a few of the big Phoenix office deals that closed at the beginning of 2018. 

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It Just Got Even Easier to Add Listings to OfficeSpace.com

While it has always been free and easy to add your listings to OfficeSpace.com, we’re excited to announce that it just got even easier!

Over the last couple of weeks, you may have been contacted about sending us your flyers, personal websites, or adding us to your e-blast. We now have a dedicated team that will update your listings at no cost or disruption to you. Simply send us your flyers, email us your company websites, or add us to your e-blasts – we’ll take care of the rest.

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New Partnership Brings Commercial Property Data to EDOs

We’re excited to announce that OfficeSpace.com has joined forces with Community Systems, a leading technology company dedicated to the economic development industry. Through this partnership, OfficeSpace.com‘s commercial listings will now be exclusively featured on economic development organization (EDO) websites across the country and visible to thousands of site selectors, brokers, and companies seeking commercial property data nationwide. 

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Susie Algard Appoints Mark Ashida as New CEO of OfficeSpace.com

[SEATTLE, WA – Feb, 27th 2018 ] – OfficeSpace.com, the leading commercial real estate listing service that connects tenants and brokers, has announced that technology industry veteran Mark Ashida has joined the company as its new Chief Executive Officer, replacing founder Susie Algard. As CEO, Ashida will lead strategy, revenue and growth for the company. Algard will continue as Chair of the Board of Directors of OfficeSpace.com. Continue reading “Susie Algard Appoints Mark Ashida as New CEO of OfficeSpace.com”