What does commercial property insurance cover?

It covers a business's physical assets — the building, plus business personal property like computers, equipment, inventory, and furniture — against fire, storms, theft, and vandalism. Many policies add business income coverage for revenue lost while damage keeps you closed. Floods and earthquakes are typically excluded and require separate policies.

Do I need commercial property insurance if I rent my space?

Usually yes. Your landlord's policy covers the building, not your property inside it. A tenant policy covers your equipment, inventory, and improvements you made to the space, and most commercial leases require you to carry it.

What is coinsurance on a commercial property policy?

A coinsurance clause (commonly 80%, 90%, or 100%) requires you to insure the property for at least that percentage of its value. If you insure for less, the carrier reduces every claim payment proportionally — not just total losses. It's the most common way businesses discover they're underinsured at claim time.

What's the difference between replacement cost and actual cash value?

Replacement cost pays what it costs to replace damaged property with new equivalent property. Actual cash value pays replacement cost minus depreciation, so a five-year-old machine pays out at its depreciated value. The valuation basis is printed on the declarations page and makes a large difference in what a claim actually pays.

Is commercial property insurance the same as a BOP?

No. A Business Owner's Policy (BOP) bundles commercial property and general liability into one policy for small businesses. A standalone commercial property policy covers only the property side, and is common when a business needs higher limits or doesn't fit BOP eligibility.

How long should I keep commercial property policies?

Keep the current policy and at least seven years of expired ones, since claims and disputes can surface well after a loss. Keep claim files and the equipment or inventory records behind your limits for as long as you own the property — after a loss, those records are what your payout is built from.

Insurance

Commercial Property Insurance Policy

Commercial property insurance is a business policy that pays to repair or replace your building, equipment, inventory, and other physical assets after fire, storms, theft, vandalism, and other covered events. The declarations page lists the covered location, the building and business personal property limits, the deductible, and the coinsurance percentage.

Written & maintained by the Granite team · Last updated August 2026

Overview

A commercial property policy covers the physical side of a business: the building (if you own it), and the business personal property inside — computers, tools, furniture, and inventory. Many policies add business income coverage, which replaces lost revenue while damage keeps you closed.

The numbers on the declarations page matter more than most owners realize. The valuation basis (replacement cost vs. actual cash value) decides whether you get new-for-old or depreciated payouts, and the coinsurance clause penalizes you at claim time if you insured the property for less than the required percentage of its value. Floods and earthquakes are almost always excluded and need separate coverage.

When you’ll get your Commercial Property Insurance Policy

You bought or leased a commercial space and your lender or landlord requires coverage
You renewed or switched carriers on your business property coverage
You updated limits after buying equipment or growing inventory
You run a home-based business whose gear exceeds what homeowners insurance covers
You filed a property claim and received revised policy paperwork

What’s on your Commercial Property Insurance Policy

These are the fields Granite reads and extracts automatically the moment you upload one.

Named Insured: The business the policy covers.
Carrier & Policy Number: The insurer and the unique policy identifier.
Covered Premises: The address of each scheduled location.
Building Limit: The most the policy pays to repair or rebuild the structure.
Business Personal Property Limit: The limit for contents — equipment, inventory, furniture.
Business Income Limit: Coverage for lost revenue while damage keeps you closed, when included.
Deductible: What you pay out of pocket per occurrence.
Coinsurance & Valuation: The required insured-to-value percentage, and whether losses pay at replacement cost or actual cash value.

How long to keep it

Keep the current policy plus at least 7 years of expired ones. Keep documentation of any claim, and the inventory records behind your limits, as long as you own the property.

Property claims and disputes can be filed years after a loss, and proving what was covered requires the policy in force at the time. Your equipment and inventory records also do double duty: they justify the limits you bought, and after a total loss they're the evidence your claim payout is built from.

How Granite handles your Commercial Property Insurance Policy

Granite reads your commercial property declarations (carrier, policy number, covered premises, building and business personal property limits, deductible, coinsurance, and valuation basis) and files each policy year with your business insurance. When you need to check a limit against new equipment or pull the policy behind an old claim, it's searchable instead of buried, and Granite reminds you before the term lapses.

FAQ

Commercial Property Insurance Policy: common questions

What does commercial property insurance cover?: It covers a business's physical assets — the building, plus business personal property like computers, equipment, inventory, and furniture — against fire, storms, theft, and vandalism. Many policies add business income coverage for revenue lost while damage keeps you closed. Floods and earthquakes are typically excluded and require separate policies.
Do I need commercial property insurance if I rent my space?: Usually yes. Your landlord's policy covers the building, not your property inside it. A tenant policy covers your equipment, inventory, and improvements you made to the space, and most commercial leases require you to carry it.
What is coinsurance on a commercial property policy?: A coinsurance clause (commonly 80%, 90%, or 100%) requires you to insure the property for at least that percentage of its value. If you insure for less, the carrier reduces every claim payment proportionally — not just total losses. It's the most common way businesses discover they're underinsured at claim time.
What's the difference between replacement cost and actual cash value?: Replacement cost pays what it costs to replace damaged property with new equivalent property. Actual cash value pays replacement cost minus depreciation, so a five-year-old machine pays out at its depreciated value. The valuation basis is printed on the declarations page and makes a large difference in what a claim actually pays.
Is commercial property insurance the same as a BOP?: No. A Business Owner's Policy (BOP) bundles commercial property and general liability into one policy for small businesses. A standalone commercial property policy covers only the property side, and is common when a business needs higher limits or doesn't fit BOP eligibility.
How long should I keep commercial property policies?: Keep the current policy and at least seven years of expired ones, since claims and disputes can surface well after a loss. Keep claim files and the equipment or inventory records behind your limits for as long as you own the property — after a loss, those records are what your payout is built from.

Sources

This page is checked against primary and authoritative sources:

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