Commercial building insurance is just what it implies. It is business insurance. Essentially, it is insurance which guarantees coverage for a commercial building. It protects against losses that result from theft, vandalism, fire and natural disasters. When looking into commercial building insurance, make sure you understand what kind of coverage you agree to. Depending on the type of coverage, it may only be for the property’s structure. Other kinds of coverage include furnishings, equipment, and personal injury or death that occurs on the business premises.

Commercial building insurance is generally divided into two basic types of insurance coverage. These are named-peril policies, and all-risk policies. Actually, the coverage you receive with each, is just what its name implies.

Named peril policy coverage will protect your property in the event there is an unforeseen calamity. Specific coverage instances are named in the policy document. A named peril policy could be set up to cover damage that results from only fire and explosions, if you so choose. It may or may not include floods and earthquakes. With this type of policy, the only events covered are those specified in the policy.

In writing a named-peril policy, the insurance company brainstorms a list of likely unforeseen events that would cause damage. These specific perils are clearly listed in your policy. In fact, there will be a clause that states any event, not specifically listed, is not covered under this policy.

A named-peril plan is the exact opposite of an all-risks plan. All-risk coverage plans protect against all probable sources of damage, except those designated in the policy as a specific exclusion. Floods and earthquakes are generally two such events that might be excluded. However, coverage for these natural disasters can be added into the policy if you wish. An all-risk coverage policy protects business property in the event of an unexpected or unplanned for disaster.

The named-peril coverage plan is more expensive, but that is because it covers so much more. Most businesses find a named-peril coverage policy is more than sufficient, but they generally include a rider that covers flooding. Only the business owner can determine their insurance needs. To a large extent, it depends on the location of the business, as well as the property and equipment involved.

There’s such a wide variety of companies and packages, that most business owners can find a small business package that meets their precise needs. It is important to be mindful, however, when determining what you wish to insure, and for how much. Take stock of your business property, and figure out the value involved. Decide what things need insuring, and what does not need to be insured. When you take stock, be sure to consider the buildings involved, equipment and machinery, inventory, documents and business records. Also, include any databases and vehicles used for the business, as well.

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