Commercial Property Insurance in Vermont 

What is Commercial Property Insurance?

Businesses that have commercial properties in Vermont have a lot invested in the land and buildings that they own. Should anything happen to a property, the financial fallout could devastate a business. Commercial property insurance helps businesses protect the properties they own so that covered disasters won’t be as financially devastating.

Commercial property insurance is a specialized form of business insurance. Policies are similar to homeowners insurance policies, but they’ve been adapted for the unique risks and needs that commercial properties have.

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What Businesses Need Business Property Insurance?

Most businesses that own property in Vermont should consider getting business property insurance. For, few businesses could afford to repair or replace their property if it was significantly damaged or destroyed.

In some cases, businesses with property in Vermont may even be required to carry business property coverage. It’s common for loans and leases to stipulate minimum coverage requirements that a business must meet.

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What Protections Does Business Property Insurance Provide?

Most business property insurance policies offer two main coverages:

  • Building Coverage, which normally is used to protect buildings
  • Contents Coverage, which normally is used to protect equipment and inventory

In addition to these protections, a few policies may add other coverages. For example, a policy might also provide earthquake and/or flood coverage, which are two peril-specific protections.

Does Business Property Insurance Provide Liability Protection?

While business property policies parallel homeowners policies by offering building and contents coverages, these policies differ from homeowners policies when it comes to liability protection. Whereas most homeowners policies offer some personal liability coverage, business property policies usually don’t provide any liability coverage.

The lack of liability coverage in business property policies isn’t because businesses don’t face liability risks. Instead, it’s because businesses face many and varied liability risks. Most businesses are better off getting the specific liability coverages they need through liability-only policies, rather than making do with a single solution that’s tacked onto a property coverage.

Although liability policies often have to be purchased separately, an insurance agent who specializes in business property coverage will frequently also be able to assist with commercial liability policies.

What’s the Difference Between a Closed-Perils and an Open-Perils Policy?

Commercial property policies can be written as closed-perils or open-perils policies. The difference between these two types of policies lies in the risks that they cover. Closed-perils policies generally only cover the risks that are listed within their paperwork, and open-perils policies usually cover any risks that aren’t explicitly excluded within their paperwork.

Overall, open-perils policies offer broader protections than closed-perils policies. There may be an occasional exception, though.

What Commercial Property Limits Should Businesses Select?

When selecting limits for a commercial property policy, there are several factors to consider. Businesses might want to choose building coverage limits that are equal to the fair-market value or the rebuilding cost of their property. When selecting contents coverage limits, businesses may want to consider the fair-market value or replacement cost of their equipment and supplies.

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How Can Vermont Businesses Get Commercial Property Insurance?

Choosing commercial property coverage is a big decision, and one that involves multiple considerations. In addition to selecting coverages and limits, businesses also need to compare individual policies against each other in order to find the best one. This process is both laborious and time-consuming.

To get help with the process, businesses should contact an independent Vermont insurance agent who’s helped other businesses find commercial property insurance. Independent agents are free to compare policies from any insurer, and someone who’s familiar with this coverage will know how to go about selecting a policy. They’ll be able to assist with coverage and limit selection, break down policies’ differences and even make sure a policy meets any minimum coverage requirements a business’ loan or lease has.

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