Accidents can happen at your place of business that damage your building or the equipment inside. Whether a kitchen fire eats through your restaurant, someone vandalizes your front windows, or a windstorm damages your roof, the cost to repair the damage might be too much for your business to bear. That’s why small business owners need commercial property insurance to protect their finances from these risks. We’re here to help you narrow down your options and choose the best commercial property insurance provider. To choose the best commercial property insurance companies, we evaluated 18 commercial property insurance providers in the following categories: building requirements (24%), National Association of Insurance Commissioners (NAIC) customer complaint index (16%), standalone commercial property coverage (16%), revenue limits (12%), policy limits (8%), online purchase options (8%), state availability (8%), and financial stability (8%). Best Commercial Property Insurance Best Commercial Property Insurance Final Verdict Frequently Asked Questions Why We Chose It Thimble offers a robust BOP that includes business interruption insurance and limited off-premises property coverage. It’s available in all states, and it’s easy to get a quote and buy a policy online. Pros & Cons Pros Nationwide BOP availability Purchase online in minutes Includes limited off-premises property coverage Highly-rated mobile app Cons Maximum total insurable value is $1.5 million per location Overview You can get commercial property coverage with Thimble via a business owner’s policy (BOP), which includes general liability, commercial property, business interruption insurance, and $10,000 in off-premises property coverage. Thimble’s BOP is available in every state and you can purchase coverage online in minutes. The company provides several convenient digital tools, such as a highly-rated mobile app for policy management, and a free certificate manager that makes compliance easy. Thimble’s policies are underwritten by Markel and National Specialty Insurance Company, which are both rated A (Excellent) for financial strength by AM Best. However, Thimble will only write a policy for up to $1.5 million per location, so it won’t serve businesses with high-value buildings. Add-Ons Workers’ compensation, business equipment, and professional liability Read more in our Thimble small business review. Why We Chose It Next offers commercial property coverage that includes business personal property, business interruption, and equipment breakdown coverage. Plus, you can purchase online and get a live shareable certificate of insurance. Pros & Cons Pros Offers comprehensive coverage Easy online quote and application Rates as low as $17 per month Live certificate of insurance Fewer complaints with the NAIC than expected Cons Tools and equipment coverage only available for contractors and cleaners Not available in Florida Limited to $3 million in coverage Overview Next offers comprehensive commercial property coverage that covers buildings, business goods and gear, plus inventory, equipment breakdown, and business income. The covered losses are standard, and you can add coverage for terrorism events. However, you can’t get earthquake coverage from the company, and inland marine (tools and equipment) is only offered for certain industries. Purchasing coverage from Next is quick and results in a live certificate of insurance that is easy to share with clients. You can also add free additional insureds at any time. Premiums start at $17 per month, and you can get a 10% discount if you bundle two or more policies. Next has an A- (Excellent) financial strength grade with AM Best and fewer complaints with the NAIC than expected given the company’s size. Next was also our top pick for the best small business insurance companies of 2023. Add-Ons Terrorism coverage Why We Chose It CNA doesn’t have a square footage limit for buildings under $10 million which makes it a good choice if you have a large property you need to ensure. Pros & Cons Pros No square footage limit for buildings under $10 million Includes equipment breakdown Comes with business income and extra expense Includes some off-premises coverage Cons Not available in Alaska or Hawaii Not available for online purchase Overview CNA offers relatively high coverage limits with no square footage maximums for buildings under $10 million. You can purchase standalone commercial property coverage or get a BOP from the company. Coverage is comprehensive—it includes equipment breakdown, business income and extra expense, limited off-premise, and even some protection against identity theft and employee dishonesty. CNA has an A (Excellent) financial strength rating with AM Best and a low complaint rate with the NAIC over the last three years than expected given the company’s size. Coverage is not available in Alaska or Hawaii, and you can’t get an online quote. Add-Ons CNA offers 18 industry-specific property endorsem*nts Why We Chose It Nationwide covers most businesses with up to $20 million in commercial property and $20 million in annual sales. Pros & Cons Pros Buildings and personal property covered up to $20 million Ranked third by J.D. Power for small commercial insurance A+ (Superior) financial strength rating with AM Best Standalone coverage includes business income and extra expense coverage Cons Not available in AK, CA, FL, HI, LA, NY, OK No online application Few policy details online Overview Nationwide will cover up to $20 million in buildings and business personal property for businesses with up to $20 million in annual sales, with the exception of wholesalers and manufacturers, which are limited to $5 million. The company offers standalone commercial property coverage that includes business income and extra expense coverage, along with a business owner’s policy (BOP). However, few details about coverage are available on its website, and you’ll need to work with an agent to get a quote or buy a policy. Nationwide has a third-place ranking from J.D. Power in the 2022 U.S. Commercial Insurance Study and an A+ (Superior) financial strength rating from AM Best. However, the company had slightly more complaints with the NAIC over the last three years than expected given its size. Add-Ons Not disclosed Why We Chose It State Farm boasts the top financial strength grade from AM Best and the top ranking in the J.D. Power 2022 U.S. Small Commercial Insurance Study. Pros & Cons Pros A++ (Superior) financial strength grade from AM Best Top-ranked by J.D. Power for small commercial insurance Offers a comprehensive BOP Cons Few policy details available online Must work with an agent to buy Overview State Farm has the top financial strength grade from AM Best, and J.D. Power’s ranked it #1 in its 2022 U.S. Small Commercial Insurance Study. The company offers a comprehensive BOP that includes equipment breakdown, loss of income, and money and securities protection at no additional premium. You can add professional liability to the policy, too. However, few details are available online. For example, State Farm doesn’t disclose coverage limits or square footage limits online, so you’ll need to speak with an agent to find out if your business is eligible for coverage. You can’t buy coverage online, either, but you can get a general cost estimate. Add-Ons Not disclosed For small businesses without large or high-value commercial buildings, Thimble will be the best option in most cases for a business owner’s policy, while Next makes purchasing standalone coverage quick and easy. It’s worth comparing rates between the two no matter the type of coverage you need. Given State Farm’s exceptional third-party ratings, business owners who don’t mind speaking with an agent should get a quote from the company as well, but make sure to ask for coverage details. If you own a large building, CNA may be your best bet, while Nationwide offers the best coverage for high-value properties. Commercial property insurance typically covers repairs to or replacement of your building and its contents because of the following: Many commercial property policies also cover equipment breakdown and lost income from these same events. If commercial property coverage is part of a business owner’s policy additional coverages may be included as well. Commercial property insurance comes with several limitations that may lead to gaps in coverage, including: If your building, equipment, or inventory were damaged or stolen, the cost of repair or replacement may be more than you can afford. Furthermore, if your business needed to shut down for reconstruction after an incident, it might not survive the loss of income. Commercial property insurance, which may also be part of a business owner’s policy, protects against those risks. If you rent your place of business, your landlord may require you to carry commercial property coverage. However, you should consider getting commercial property insurance to protect your business assets even if it isn’t required. Many business owners address their need for both commercial property and general liability coverage with a business owner’s policy. Yes. A sole proprietor can and should purchase commercial property insurance if they own or rent a commercial space for business purposes, or even if they run a home-based business, as their homeowners insurance probably won’t cover them.Best Commercial Property Insurance
Best for Small Business BOPs : Thimble
Easy Online Purchase : Next Insurance
Best for Large Commercial Properties : CNA
Best for High-Value Commercial Property : Nationwide
Most Likely to Pay Your Claim and Treat You Well : State Farm
Final Verdict
Frequently Asked Questions
What Does Commercial Property Insurance Cover?
What Are the Limitations of Commercial Property Insurance?
How Does Commercial Property Insurance Protect Your Business?
Is Commercial Property Insurance Legally Required?
Can a Sole Proprietor Get Commercial Property Insurance?
FAQs
How to save money on commercial property insurance? ›
- Shop your coverage with several providers. ...
- Bundle with a business owner's policy. ...
- Consider a different kind of bundle. ...
- Evaluate your protection and your risks. ...
- Increase your deductible. ...
- Inquire about a claims-free discount. ...
- Ask about loss-prevention programs. ...
- Look for group rates.
Rates are often determined by your industry, level of experience, income, location, and more. But that doesn't mean there's nothing you can do. Your first step should be to use an independent insurance agent when shopping around for commercial insurance coverage.
Why is commercial property insurance so expensive? ›The continued impact of catastrophic events is a major factor driving up costs, along with the increasing cost of capital, financial market volatility and inflation. This is an expense carriers need to pass along to customers.
What is the best commercial property to own? ›Properties With a High Number of Tenants
Properties capable of bringing in the highest return on investments are typically those with the highest number of tenants. These properties include RV parks, apartment complexes, student housing, office buildings, and storage facilities.
- Raise your deductible. ...
- Combine your coverages. ...
- Take safety seriously. ...
- Create an un-risky business. ...
- Inform your agent.
- Increase deductibles.
- Maintain a good driving record.
- Bundle insurance policies.
- Choose safer vehicles.
- Implement a driver safety program.
- Regularly review and update your policy to ensure you are not over-insured.
Deductibles are what you pay before your insurance policy kicks in. By requesting higher deductibles, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 to 30 percent.
Which insurance company says surprisingly great rates? ›Surprisingly Great Rates - State Farm®
How is commercial insurance calculated? ›Typically, insurance premiums for commercial properties are set by multiplying the value of the building and its contents by a value that correlates to level of risk. Most of the time, properties with high risk have higher property insurance rates, while lower risk properties cost less to insure.
What are the factors for commercial property insurance rating? ›When it comes to underwriting and rating commercial property insurance, insurers examine four key characteristics of a building: its construction, occupancy, protection and exposure (COPE).
Is commercial insurance increasing? ›
Commercial insurance rates continued to rise in the second quarter, and average increases have accelerated so far in the third quarter, senior executives at Arthur J. Gallagher & Co. said Thursday as the brokerage reported its financial results.
Is commercial insurance the same as property insurance? ›This insurance essentially provides the same kind of protection as property insurance for consumers. However, businesses can usually deduct the cost of commercial property insurance premiums as expenses. Commercial property insurance generally does not cover losses arising from tenants using the building.
What commercial property has the highest ROI? ›Properties with Triple Net Leases
As a general rule, properties with the highest number tenants offer the highest return on investment, a triple net property is a high ROI exception to the rule. Triple net properties are usually single tenant spaces, but these tenants are more likely to sign long term leases.
- 1) Office Buildings: ...
- 2) Retail Outlets: ...
- 3) Industrial Warehouses: ...
- 4) Shop-Cum-Office (SCO): ...
- Key Considerations Before Investing in Commercial Real Estate Properties. ...
- Conclusion.
What is a Good Return on Commercial Property? A good ROI in real estate depends on several factors, such as the type of property, location, market conditions, and your investment goals. Generally, a good ROI in real estate is considered to be at least 8% to 10%.
How to lower commercial truck insurance? ›- Clean License Drivers Are Best. It's best to have drivers with clean licenses, as drivers who have points or convictions will affect your premiums. ...
- Use Driver Training Programs. ...
- Monitor Your Drivers. ...
- Keep an Eye on Younger Drivers. ...
- Telematics. ...
- Use Trackers, Alarms and Immobilizers. ...
- Cameras. ...
- Keep Your Fleet Young.
The standard commercial property insurance deductible is $250.
What adds value to a commercial property? ›Value enhancing amenities can include something simple like installing a playground for a multi-family property or adding a conference room for your office tenants. Additionally, one of the biggest value-add improvements for office buildings is adding a health and wellness / fitness center.