Is Commercial Insurance The Same As Business Insurance?

Commercial Insurance Vs. Business Insurance

Commercial insurance is a type of business insurance, which has quite a few off-shoots. Generally, business insurance protects a business from fire, theft, and natural disaster damage as well as liability, keeping it safe from lawsuits and unexpected replacement costs. Commercial insurance is intended to cover equipment and furnishings of the business, and can often be written off as an expense.


What is Business Insurance?


Business insurance covers businesses for property damage and liability, including workers’ compensation for injured employees. It can also include coverage for company vehicles. Covered events are all standardized to include theft, vandalism, and weather-related events.


What is Commercial Insurance?


Here at Redwood, we offer commercial property insurance. Commercial insurance helps to pay for damage to the building or equipment that the business cannot afford to cover on its own. This includes damages from weather-related events, building collapse, explosion, civil commotion, equipment breakdown, along with damage caused by vehicles, vessels, aircraft, and vandalism. The amount of coverage a business needs depends on the property and equipment value, its location, and other factors.


Commercial property differs from business insurance because it covers commercial equipment. You can also usually deduct the cost of commercial insurance premiums as expenses on your tax returns. It can be a large expense for companies with heavy equipment and machinery, such as for railroads and manufacturers. 


The value of the business’s physical assets is what determines the rates for commercial insurance. Take note of all your physical assets, including the building, before you meet with the insurance adjustor. The replacement value will help decide how much coverage you need. Weather conditions in the area are also an important factor for the rate, as disaster-prone areas will have higher rates to counter the more likely damages. If your location has good fire protection, you will probably get a lower rate. Buildings made of combustible materials will cost more to insure. To get a better fire rating, use fire-resistant materials for any remodels and renovations. Make sure you have a fire hydrant near your building and have a fire alarm and sprinkler system installed. A security system will also boost your rating and potentially lower your premiums.


What Does Commercial Insurance Cover?


Commercial property insurance covers the building that your business operates out of as well as many internal appliances and equipment. Covered items include all office equipment and furniture, essential documents and records, and manufacturing or processing equipment. Also covered are any inventory the business keeps in stock, the fence and landscaping, and signs and satellite dishes. These are all things you should itemize for your insurance agent.


In the event of theft, damage, or natural disaster, you will want your business to be able to replace its physical assets. For all of your property and casualty insurance questions, contact the experts of Redwood Agency Group.