Commercial building insurance is business insurance. In other words, it is insurance that ensures coverage for a commercial building against losses that result from theft, vandalism, fire and natural disasters. When looking at commercial building insurance, make sure you understand exactly what coverage you will be getting. Some types of commercial building insurance cover only the property’s structure. Other types will include coverage for furnishings, equipment, and even personal injury or death that might occur on the premises of your business.

When investigating commercial building insurance, you will find it is generally divided into two basic types of insurance, named-peril policy, and all-risk policy. For all intents and purposes, the coverage is just what each name implies it is.

Named-peril policy coverage protects the property in the event there are unforeseen calamities. These instances will be named in the policy document. A named-peril policy might cover damage that results from fire and explosions. It might include floods and earthquakes. Because this type of policy only covers explicitly listed risks, you will want to be certain you include the exact kinds of perils for which you want coverage.

When it’s time to write up a named-peril policy, the insurance company generates a list of likely damage causes. These particular perils are clearly listed in the policy. There will also be a clause stating that any cause of damage, not specifically listed, will not be covered under this policy.

Named-peril coverage is the opposite of an all-risks coverage plan. With an all-risks coverage plan the business is covered for all potential sources of damage, except any that may be written into the policy as a specific exclusion. Floods and earthquakes are the two items that are most typically excluded, but coverage for these natural disasters can be added into the policy if the consumer so chooses. The all-risk coverage policy is advantageous because it protects the property owner in the event of most unexpected disasters.

Because it covers so much more, an all-risk coverage plan tends to be more expensive. However, for the majority of businesses, a named-peril coverage policy is sufficient, along with a rider that specifically covers flooding. Still, only the business owner can truly determine his or her insurance needs. It depends, to a large extent, on the location of the business, as well as the property and equipment you need to protect.

With the variety of companies and packages out there, most business owners can find a small business package that meets their specific needs. Be careful, however, to determine what exactly you wish to insure, and for how much. It is wise to take stock of your business property, figure out the value involved, and then decide what is and is not worth the cost of insuring. Some things to keep in mind when you begin taking stock are the buildings involved, equipment and machinery, inventory you may have on hand, documents and business records. This would include databases and vehicles used in the business.