Commercial property insurance provides financial coverage for damage to a physical business or office space—including valuable assets inside—caused by an external incident. These incidents can include fire, robbery, vandalism, or natural disasters such as earthquakes, floods, or hurricanes.
The protection doesn’t specifically pertain to loss of money due to diseases or pandemics, but over the course of forced lockdowns many business have been sitting empty. This may actually cause insurance problems for these property owners. Insurance companies view unoccupied premises as risks, due to the increased likelihood of break-ins, vandalism, fire, and water damage. These properties that have been left sitting unused are the responsibility of the insured, and they must disclose this information to their insurance provider.
With this in mind, it’s important to note just how important commercial property insurance is in general, and especially during a pandemic. Let’s have a look at some reasons why:
1. Property damage while unoccupied
As previously stated, spaces that are left unoccupied for a long period of time are at higher risk to damage caused by break-ins and vandalism. This is why it’s crucial to understand your commercial property insurance policy and to keep your provider up to date with the shutdown of your business space. Many companies offer a certain number of days for which a business can be unoccupied before it disqualifies for property insurance.
2. Natural disasters, fires, or floods
Not only is your property considered high risk to break-ins, but to natural calamities too. Just because you mightn’t be using the premises doesn’t mean that they’re automatically protected from fires, floods, or natural disasters. If you’re not bringing home the same income due to the pandemic then the last thing you want is for something to happen to your place of business, and to not have the correct commercial property insurance. It isn’t difficult to guess the financial hardship you could fall into over such an unfortunate event.
3. Coming out of lockdown
If and when you return to work, you want to be able to get back into your workplace, and not have to worry about anything beyond this. Not only will having your insurance in place save you from the cost of any damages during your time away, but it will also be one less thing to worry about when you open your doors again. With the minimum price of commercial property insurance for a small business in Canada being CAD$450 a year, it will feel like a small price to pay compared to the huge expenses you may face without insurance.
4. You’ve stayed open
If you’ve stayed open during the pandemic, you might’ve experienced a whole myriad of scenarios where you would be glad to have your property insurance in order. Your business may have been visited by even more customers, or disgruntled customers who caused damage; in these strange times, you may even have experienced theft or break-ins. You’re still going to need your insurance for the same reasons as you would without the pandemic—to cover your physical assets. Make sure to check in with your insurance provider for any changes in rules or guidelines that you should be aware of.
What if I’ve lost money or work because of the pandemic?
Unfortunately, commercial property insurance only covers you for physical loss or damage to property or assets within your building. However, business interruption insurance can cover you for any loss of cash flow or earnings due to extenuating circumstances such as a pandemic. This may cover you for any loss of profit that would’ve been made during the time for which the business was out of action. It could also cover the fixed cost of operating expenses that continue to incur even when the business is not operating; any expenses involved with having to move to a temporary location; or disruption costs including power, water, and telecommunication, as well as any extra expenses that are considered reasonable.
It’s important for your business to have commercial property insurance for your brick-and-mortar workspace during a pandemic. If your business is unoccupied for a certain amount of time, you should let your insurance provider know so that you can still be covered for things such as vandalism, breaks-ins, fires, floods, and natural occurrences. If the property is left unattended for very long, it is considered a high risk for certain damages, so staying on top of your insurance policy during this time will be a must. If you’re losing non-physical aspects of your business such as money, resources, or work, then you might want to consider looking into business interruption insurance as well.
