What is business hazard insurance?

Small business hazard insurance protects your property from damages caused by events like fire, theft, and vandalism. Insurers typically use the term commercial property insurance to describe this coverage. Small businesses can get hazard insurance in a business owners policy (BOP), which combines commercial property, liability, and more.

What does small business hazard insurance cover?

Hazard insurance for a small business covers owned or rented commercial buildings from damage. It protects additions, permanent fixtures, and equipment. It also provides insurance for business contents, like computers, inventory, and tools.

Business hazard insurance offers valuable protection from a variety of covered risks, like theft, fire, vandalism, and certain weather events. For example, if a hailstorm damages your roof, business equipment, and furniture, your hazard insurance can help pay for your repair and replacement costs.

Do I need business hazard insurance for my small business?

All businesses that own or rent property should consider business hazard insurance to safeguard against damage. Paying out of pocket to recover from unexpected events, like theft or vandalism, could disrupt your business if you're unable to function normally. Commercial hazard coverage can help you recover quickly and resume work.

Hazard insurance for SBA loans

The U.S. Small Business Administration (SBA) requires small businesses to have hazard insurance when getting an SBA loan. This coverage helps protect both the business's assets and the SBA's investment. In other words, it minimizes financial risk for everyone involved.

The commercial property coverage on a business owners policy meets the SBA's guidelines for business hazard insurance.

Hazard insurance for home-based businesses

Home-based businesses can also benefit from business hazard insurance. A homeowners policy will cover physical damage to the building if something happens, but it might not offer enough protection for equipment, inventory, and other business property. Customized commercial coverage can help make sure you're adequately protected.

What isn't covered by business hazard insurance?

Business hazard insurance doesn't cover every scenario or type of damage you might experience. Typical exclusions include:

  • Earthquakes and hurricanes: To cover damage from these hazards, you can add endorsements to your business owners policy.
  • Commercial autos: Company vehicles require a separate commercial auto insurance policy.
  • Employee injuries and illnesses: Employers are typically required to have workers' compensation to cover employees who get injured or sick on the job.

Your insurance coverage should be customized to your specific needs. Speak to an insurance expert when getting business hazard insurance for guidance on what other coverages will offer the right protection for you.

How much does business hazard insurance cost?

Your commercial property insurance cost depends on many factors, including your company's size, years in business, employees, industry, and property value. A BOP is a cost-effective option for securing hazard insurance coverage for your small business.

Learn more about what can influence your cost and find affordable rates for your business owners policy. Customized protection is a quote away.

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