Commercial Property Insurance in California

Commercial property insurance in California can help provide coverage for the physical assets you need to operate your business.

When certain types of accidents or emergencies arise, you may be able to submit a claim to get help with replacement, repair or reimbursement costs.

Here are some examples of how commercial property insurance can help California business owners:

• Structure fire: Commercial property insurance can help pay for repairs and replacements if a fire breaks out at your business. This can include California wildfire insurance coverage.
• Water damage: Commercial property insurance can help pay to fix the water damage from burst pipes and other leaks. Note: This does not include flood coverage (see below for more details).
• Theft or vandalism: Commercial property insurance can cover property inside or within 100 feet of your business.

Covered events generally include damage from water, fire and wind, and man-made events like theft and vandalism.

It’s important to read your policy documents carefully to see exactly what is covered and excluded for your business. Coverage can vary between different industries.

Commercial property insurance can protect different types of property

Some of the items that your commercial property insurance policy can help protect include:

• Inventory
• Furniture
• Fixtures
• Equipment
• Structural damage
• Broken windows
• Flooring
• Business income

Types of Commercial Property insurance coverage

NEXT commercial property insurance policies in California can typically include four basic types of coverage:

Goods, gear and inventory

Commercial property insurance can help provide financial assistance if your furniture, equipment or inventory is affected by a covered event. This coverage is also known as business personal property insurance or BPP insurance.

Example: If a San Francisco jewelry store is burglarized overnight and inventory is stolen, commercial property insurance can help pay for replacements.

Business income interruption

Your insurance can help cover lost income and other related expenses during a temporary closure due to fire, water damage or another covered event. This is also known as business interruption insurance or business income insurance.

Example: If a Los Angeles massage therapy clinic has to close for two weeks after a fire, commercial property insurance can help cover the income lost during the time it takes for repairs.

Equipment breakdowns

With this coverage, you can get help with replacement or repair costs if your equipment is damaged due to a power surge or mechanical failure.

Example: If the electronic circuit control board in a Sacramento restaurant’s walk-in cooler malfunctions, commercial property insurance can help pay to fix the problem.

Buildings

Your commercial property insurance can help pay for repairs to a building you own and use for business purposes. If you’re leasing or renting a commercial space, you typically don’t need this coverage.

Example: If a windstorm damages the roof of a Fresno convenience store, commercial property insurance could help pay for the costs to repair or replace roofing material.

Does Commercial Property insurance help pay for damage from natural disasters in California?

Commercial property coverage from NEXT can help pay for fire, wind and hail damage to your business property. This extends to damage caused by certain types of weather events, including:

• Wildfires
• Tornados
• Windstorms

Volcanoes and floods are not included in NEXT commercial property coverage. The federal government’s National Flood Insurance Program is the primary resource for flood insurance, so it’s a good idea to look into this if you’re in a flood-prone area.¹

In California, the risk of earthquakes is much higher than in most other states.

NEXT commercial property insurance policies don’t include coverage for earthquakes. Most earthquake insurance in this state is provided by the California Earthquake Authority (CEA).²

Certain man-made disasters, such as vandalism and rioting, are included in NEXT commercial property insurance policies. An optional coverage add-on is available for acts of terrorism.

It’s important to read your policy documents closely to make sure you are getting the coverage you need. NEXT has a team of U.S.-based advisors who are ready to help as you review coverage options.

Is Commercial Property insurance required in California?

California does not require all businesses to carry commercial property insurance or business hazard insurance, another term used to describe this coverage.

Business owners may discover, however, they need various types of California business insurance to rent or own commercial property.

Even if you find that you’re not required to have it, commercial property insurance can help you:

Cover property damage costs

If an accident occurs, commercial property insurance can help your business remain financially stable if you need to replace or repair damaged property.

Survive business interruptions

If you need to close temporarily after a covered incident, business income insurance can help you stay afloat by assisting with lost income, moving and relocation costs and employee wages.

Secure a loan

Many banks and mortgage lenders may require proof of commercial property insurance before approving your loan. Similarly, the Small Business Administration (SBA) requires businesses to have business hazard insurance on building used as collateral for their loans.

Lease agreement

A landlord may ask you to carry commercial property insurance before they’ll agree to rent a commercial space to you. This requirement is often written into commercial leases.

What types of businesses might need Commercial Property insurance in California?

Many types of California businesses can benefit from the financial protection offered by commercial property insurance.

If you operate your business from a physical location, whether that’s an office space or a brick-and-mortar store, California commercial property insurance coverage can help protect your business assets.

Home-based businesses often have very limited coverage through their homeowner’s insurance, so commercial property insurance can provide additional coverage when needed.

In certain industries, some business owners consider commercial property insurance to be a must-have. For example, brick-and-mortar retail businesses typically maintain more inventory on-site than other businesses. Because that inventory can be damaged or stolen, commercial property coverage is particularly important.

How much does Commercial Property insurance cost in California?

The cost of commercial property insurance varies based on a number of factors, including:

• What type of work you do
• The total value of your business property
• How many employees you have
• Your business property location
• Your history of past claims
• Your work experience
• How high you set your limits

To find out how much coverage will cost for your business, start a free instant quote online.

At NEXT, 56% of U.S. customers pay $45 or less per month for commercial property insurance.**

Learn more about commercial property insurance costs.

How NEXT helps California businesses

NEXT provides commercial property insurance policies designed for California-based small businesses and self-employed workers.

It only takes about 10 minutes to get a quote, review your coverage options, choose your policies and download a certificate of insurance.

Start an instant quote online today.

Our team of licensed insurance advisors is standing by to assist you if you have any questions along the way.

¹ National Flood Insurance Program

² Earthquake Insurance

³ FAQs for Employers

⁴ Insurance Requirements