Why aren’t floods and earthquakes covered?

Commercial property policies exclude flood and earthquake by default because they’re catastrophic, correlated risks — when they hit, they hit many policies at once. Separate flood and earthquake policies (or endorsements) are available and we can place them alongside your property coverage.

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

Usually yes. Your landlord’s policy covers the building structure, but it doesn’t cover your business personal property — furniture, equipment, inventory, computers. You also may need coverage for tenant improvements you’ve made to the space.

What is business personal property (BPP)?

BPP is everything you own inside your business space that isn’t part of the building itself — desks, chairs, computers, inventory, tools, supplies, equipment. It’s one of the most important coverages for businesses that lease their space.

What is coinsurance and why does it matter?

Coinsurance is a policy condition that requires you to insure property to a minimum percentage (usually 80-90%) of its value. If you underinsure, the carrier reduces claim payouts proportionally. It’s one of the most common and expensive mistakes in commercial property insurance.

Does commercial property cover lost income?

Not by default. Business income coverage (also called business interruption) is usually added as an endorsement. It replaces lost revenue and covers continuing expenses during the restoration period after a covered property loss.

Can I bundle property with GL?

Yes — that’s essentially what a Business Owner’s Policy (BOP) does. It bundles GL, property, and often business income coverage at a discounted rate. It works well for smaller, straightforward operations. Larger businesses usually benefit from standalone policies for more control over limits and forms.

Commercial Property Insurance for US Businesses

Commercial property insurance covers your building, equipment, inventory, and workspace contents against fire, storm, theft, and other covered perils. If your business owns or leases a physical space, this is the policy that protects what’s inside it — and often the structure itself.

Core Coverage

The Two Coverages That Anchor Every Property Policy.

Most commercial property policies divide into two main parts: the building itself and the property you keep inside it. Knowing which one applies to your operation drives the rest of the placement.

Building coverage

Covers the structure itself — walls, roof, foundation, permanently installed fixtures, HVAC, plumbing, electrical systems. If you own the building, this is your primary asset protection. If you lease, your landlord’s policy covers the structure, but you may still need coverage for tenant improvements.

Business personal property (BPP)

Covers everything you own inside the building — furniture, equipment, computers, inventory, supplies, and tools. This is the coverage that matters most for tenants and businesses that don’t own their space.

Reference

What Commercial Property Covers.

The main components of a standard commercial property policy.

Building structure

Property

What it pays for

Walls, roof, foundation, permanently installed fixtures, HVAC, plumbing, electrical

Common example

Fire damages your warehouse roof and HVAC system

Business personal property

Property

What it pays for

Furniture, equipment, computers, inventory, supplies, tools

Common example

Theft of computer equipment from your office

Property of others

Property

What it pays for

Property in your care, custody, or control that belongs to clients or vendors

Common example

Customer’s equipment damaged while stored at your facility

Covered perils

Property

What it pays for

Fire, lightning, windstorm, hail, explosion, smoke, vandalism, theft, burst pipes, vehicle impact

Common example

Burst pipe floods your retail store and damages inventory

Business income (if endorsed)

Endorsement

What it pays for

Lost revenue and continuing expenses during restoration after covered loss

Common example

Fire closes your restaurant for 3 months during repairs

What Commercial Property Does Not Cover

These exposures require separate policies or endorsements.

Flood damage

What you need

Separate flood policy (NFIP or private)

Earthquake damage

What you need

Separate earthquake policy or endorsement

Business vehicles

What you need

Commercial auto insurance

Employee theft

What you need

Crime / fidelity bond

Wear and tear or gradual deterioration

What you need

Not insurable — maintenance issue

Property in transit

What you need

Inland marine insurance

Data and software

What you need

Cyber liability insurance

Employee injuries

What you need

Workers compensation

Policy Forms

Named Perils vs. Open Perils

Two ways property policies define what’s covered. The form drives whether you spend a claim arguing about whether the cause of loss is on the list or whether the carrier can prove an exclusion applies.

Named Perils — only listed events are covered

Policy lists every covered event explicitly. If the cause of loss isn’t on the list, it’s not covered. Common in lower-cost policies. You know exactly what’s covered, but gaps can surprise you.

Open Perils (Special Form) — everything covered unless excluded

Covers everything unless specifically excluded. The burden shifts — instead of proving the peril is listed, you only lose coverage if the carrier can show it’s excluded. More common, more protective, and what we recommend for most businesses.

Actual Cash Value vs. Replacement Cost

How a property policy values a covered loss is the second decision that materially changes what you get back at claim time. Two valuation methods are in common use.

Actual Cash Value (ACV) — replacement cost minus depreciation. Pays the replacement cost minus depreciation. A 5-year-old commercial oven that costs $10,000 new might pay out $4,000 after depreciation. Lower premium, lower payout.

Replacement Cost — full cost to replace at current prices. Pays what it actually costs to replace the item at current prices, without deducting for depreciation. Higher premium, but you can actually replace what you lost.

Example. A 10-year-old HVAC system with a replacement cost of $25,000. Under ACV, you might receive $10,000–$12,000 after depreciation. Under replacement cost, you receive the full $25,000 needed to install a new system.

Premium Factors

How Commercial Property Premiums Are Calculated

Eight factors that drive your commercial property premium.

Total insurable value (TIV)

The sum of building value, BPP, and any other covered property. This is the starting point for every quote.

Location

Proximity to fire stations, flood zones, coastal exposure, and regional catastrophe risk all factor in.

Construction type

Frame buildings cost more to insure than masonry or fire-resistive construction.

Building age

Older buildings with outdated electrical, plumbing, or roofing cost more.

Occupancy

What happens inside the building matters. A restaurant has different risk than an office.

Fire protection and security

Sprinklers, alarms, fire extinguishers, and security systems can reduce premium.

Claims history

Recent property claims increase premium. A clean history helps.

Deductible

Higher deductible = lower premium.

Coinsurance: Most commercial property policies include a coinsurance clause — typically 80% or 90%. This means you must insure the property for at least 80–90% of its actual value. If you underinsure and have a claim, the carrier reduces the payout proportionally.

Example: If your building is worth $1M, you insure for $600K (60%), and you have a $200K claim, the carrier pays ($600K / $800K) × $200K = $150K. You eat the $50K difference.

We review TIV and coinsurance before submitting so you’re not caught short.

Comparisons

Commercial Property vs. Other Business Insurance

A few common comparisons.

Property vs. general liability

Property covers damage to your own assets. [GL](/solutions/general-liability-insurance) covers damage you cause to other people’s property. Your warehouse burns down — that’s property. Your employee damages a client’s building — that’s GL.

Property vs. business owner’s policy (BOP)

A BOP bundles property with GL and often [business income coverage](/solutions/business-interruption-insurance) at a discount. Works well for smaller operations. Larger or more complex businesses usually need standalone property and GL for more flexibility on limits and forms.

Property vs. inland marine

Commercial property covers assets at your location. Inland marine covers property in transit, at job sites, or stored off-premises. Contractors and businesses that move equipment need both.

How Rosella Places Commercial Property Coverage

Rosella is a brokerage. We don’t issue policies as a carrier. We place coverage with carriers, compare the forms, and manage the policy through its life.

Process: The process is fast because the manual work is automated, not because the judgment is rushed.

We review TIV and coinsurance before submitting

Getting the insurable value right prevents coinsurance penalties at claim time. We review your building value, BPP schedule, and any business income exposure before going to market.

We run your submission across 100+ carriers

Admitted and E&S carriers see your risk. We compare not just price but form differences — named perils vs. open perils, valuation method, sublimits, and exclusion language.

After bind, COIs in under two minutes

Certificates generated automatically. Endorsements and additional insured requests don’t require a multi-day email chain.

If your current carrier is on a named perils form and you didn’t know it, or your TIV hasn’t been updated in three years, it’s worth a review.

Frequently Asked Questions

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Tell us about your building, BPP, and any business income exposure and we will come back with real carrier options.

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Whether you’re insuring a new location, replacing a non-performing carrier, or updating coverage after a renovation, we can move. Standard commercial property placements quote within days for most building classes.

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