What is office property insurance?
Office property insurance helps protect you against the loss or damage of your business assets. It’s available as a standalone policy (also known as commercial property insurance) or as part of a business owner’s policy (BOP).
BOPs bundle general liability insurance with commercial property insurance and business interruption insurance to cover many small business risks in one simple and affordable package.
Office property insurance is for any company that operates in an owned or leased space with business equipment and inventory. If you want to help ensure that your business can recover after a fire, theft or weather-related damage, it’s important coverage to consider.
The need for office property insurance
Environmental catastrophes have become more costly to property owners. On average, there have been 8.5 catastrophes with $1 billion or more in damages each year from 1980 to 2023.
Major property losses are common in business. In 2022, 140,000 non-residential property fires produced $4 billion in losses, according to the National Fire Protection Association (NFPA). These included retail businesses, offices, manufacturing sites and industrial or utility buildings.
Over the 10-year period from 2012 to 2021, USFA tracked a 20% increase in nonresidential building fires and a 21% increase in dollar losses.
Major fires or environmental catastrophes might never strike your business. But smaller incidents such as burglary, theft and vandalism are common — and they can quickly drain your company resources.
Office property insurance is designed to help protect against the financial impact of major and minor property losses like these.
How much is office property insurance for a small business?
There’s no standard price for office property insurance. What you’ll pay depends on many factors, including:
- The nature of your business: Is it risky to operate?
- Where it’s located: Is your area prone to property crime, weather related damage or natural disasters?
- The characteristics of your building and equipment: Are they in good working order?
- Your risk mitigation protocol: Have you had a safety inspection recently? Do you have fire suppression equipment?
Your price for office property insurance also depends on how much coverage you wish to buy. The more business assets you need to protect, the higher your premium will be.
What does office property insurance cover?
Office property insurance can help protect structures you own and many of the items you keep within property you own or lease — building contents.
If you own your office building, your policy may cover the replacement value of the building itself as well as permanently installed equipment (like an HVAC system) and fixtures such as counters or cabinets.
If you rent or lease your business space, your office property insurance won’t cover the building. However, if your lease requires you to provide coverage, you’ll need to budget for that extra cost.
Building contents coverage applies whether you own or lease the building. Also known as business personal property insurance, it refers to assets located in or near your building used for business operations, including manufacturing equipment, computers, raw materials or product inventory. If you lease gear, your policy could cover that as well.
Your policy could also apply to property owned by third parties for which you are legally responsible (such as a customer’s designer clothing or furniture onsite for your repair).
Other covered losses include equipment breakdowns and business income that result from an eligible property claim.
Some common mishaps that office property insurance can address are:
- Fire
- Lightning
- Explosions
- Theft
- Vandalism
- Windstorms
- Hail
- Damage from motorized vehicles (except that caused by company-owned vehicles)
- Accidental water damage (sprinkler malfunctions or burst plumbing)
- Riots or civil disturbances
- Sinkholes
- Building collapse
What’s excluded from office property insurance for small business owners?
Common exclusions include:
- Earth movements (earthquakes, volcanoes and landslides).
- Water damage (floods, tsunamis and sewer overflows).
- Utility malfunctions (power surges, water shortages).
- Property destruction by an authorized government authority.
- Nuclear incidents (reactor meltdowns, radiation leaks).
- War and other military activities.
Types of business property that insurers typically won’t cover include:
- Business motor vehicles, boats and aircraft (these usually require purchase of a separate policy).
- Gold bullion, securities or cash.
- Agricultural land and produce growing on the land.
- Landscaping around buildings (like lawns, trees and plants).
- Fences and signs not attached to your building.
Always read your policy to see what it covers. If it doesn’t protect an asset that’s important to you, ask your insurer to add it as an insurance endorsement.
How NEXT helps small businesses with office property insurance
NEXT helps small business owners find affordable business insurance. We make it simple to get customized commercial property insurance to help protect your office, storefront or small business.
Answer a few questions to get a quote. You can insure your business 100% online in about 10 minutes and get your certificate of insurance right away. Manage your policy 24/7 online or with our mobile app.
Start a free quote with NEXT.
