When you buy something using?links found on our site, we may earn a small affiliate commission. This content?is reviewed &?supervised by?The?Los Angeles Times Commerce Team.

Best Commercial Property Insurance for Small Businesses 2024

Commercial property coverage starts as low as $27/month* when bought as part of a Business Owner's Policy

*Applies to quotes made through Insureon only. Average monthly premium calculations are estimates and may vary by state, insurance provider, and the nature of your business. Where required or allowed by state law, insurance taxes, service fees, and other surcharges may be included and billed separately from the premium.

Quotes available through: Insureon
1221 reviews
  • Commercial property insurance covers the cost of repairing or replacing business property that has been stolen, lost, or damaged.
  • Comprehensive business property insurance will typically cover damage to the building you own or rent as well as the contents inside.
  • There are many specific subsets of commercial property insurance, including inland marine insurance, BPP insurance, commercial auto insurance, and more. These are not as comprehensive but can be good for covering specific items and certain scenarios.
  • The best way to save on commercial property insurance is to buy a Business Owner Policy that includes commercial property coverage and general liability insurance.
  • On average, small businesses pay $67/month for commercial property insurance, whereas BOPs average around $57/month and include general liability coverage.
  • We recommend using an online quote tool to easily find the right insurance plan for your business and get same-day coverage.

Commercial property insurance is one of the most important business insurance coverages to have as it covers the cost of repairing or replacing business property that has been stolen, lost, or damaged.

It typically includes protection of your business’s building and other assets like merchandise and equipment. However, there are also many different subsets of property insurance that you can buy to get coverage tailored to your needs.

For example, someone who runs a small electrician business out of their home might want coverage for their tools and equipment but not the home in question, which would be covered by homeowners insurance.

Therefore, it’s important to understand the different types of property insurance and what they cover.

Top commercial property insurance companies

Advertiser Disclosure
Company Name
AM Best Financial Strength Score
Types of Insurance Offered
View Plans
A++ (Superior)
BOP - General Liability - Professional Liability - Workers' Comp - Sole Proprietors
A++ (Superior)
BOP - Professional Liability - Workers' Comp - Sole Proprietors
The Hartford
The Hartford
A+ (Superior)
BOP - General Liability - Professional Liability - Workers' Comp - Sole Proprietors - Commercial Auto - Fidelity Bond
A+ (Superior)
BOP - General Liability - Workers' Comp - Sole Properietors - Commercial Auto
Liberty Mutual
Liberty Mutual
A (Excellent)
BOP - General Liability - Workers' Comp - Sole Proprietors - Commercial Auto

Understanding Commercial Property Coverage

It’s important to note that most commercial property insurance policies can cover losses associated with theft, vandalism, fire, lightning, and windstorms, but will not cover earthquakes and floods.

What’s covered by commercial property insurance?

Comprehensive commercial property insurance can cover the following:

  • Your business’s building (owned or leased)
  • The fixtures and furniture inside your building
  • On-site business equipment and supplies
  • On-site business inventory and merchandise

What’s not covered by commercial property insurance?

Typically you need a separate specialized policy to get coverage for the following:

  • Flood or earthquake damage
  • Property in transit or used off-site
  • Company vehicles and contents
  • Property stolen by employees
  • Damage to your client’s property

Each policy is unique, so it’s important to read and understand the details in your policy so you know if you need additional coverage.

Types of commercial property insurance

Commercial property insurance comes in a variety of forms with varying coverage. The type of coverage you need depends on your business, industry, and the type of property the business owns.

Here is a look at the different types of commercial property insurance and what each can cover:

Standard commercial property insurance:

Most commercial property insurance will cover an owned or leased building as well as the contents of the building. This can include things like supplies, merchandise, stock, equipment, furniture and fixtures. It’s the most comprehensive type of property insurance on the market and is usually available as part of a Business Owners’ Policy (BOP).

There are also specialized types of commercial property insurance available for covering specific types of property or scenarios:

Inland marine insurance:

Standard commercial property insurance usually won’t cover things stored or used off-site. Inland marine insurance is a supplemental type of property insurance that protects your property when it’s away from your business, such as when it’s in transport, used for fieldwork, or stored offsite.

Business personal property insurance:

BPP insurance covers things like furniture, fixtures, merchandise, and equipment, but does not cover the building. If you rent a building and only need coverage for the contents of the building, then business personal property insurance could be a good fit. This is also ideal for home-based businesses as it can pick up where your home insurance leaves off.

Commercial auto insurance:

Most commercial property insurance doesn’t automatically cover vehicles belonging to your business. For this, you’ll need to buy commercial auto insurance as a supplement to property insurance. This can cover losses and damage associated with your business vehicles including theft and damage to the vehicle or its contents.

Discover your ideal policy in minutes Unlock plans from over 30 top providers, now! Suitcase and Shield With Checkmark GET PRICES

How much does commercial property insurance cost?

According to data from our partner Insureon, the average small business pays around $67 per month for a basic commercial property insurance policy, but it can be even cheaper when you bundle it as part of a Business Owner Policy.

Get a BOP with commercial property coverage for as low as $27/month*

*Applies to quotes made through Insureon only. Average monthly premium calculations are estimates and may vary by state, insurance provider, and the nature of your business. Where required or allowed by state law, insurance taxes, service fees, and other surcharges may be included and billed separately from the premium.

That said, how much you’ll pay for commercial property insurance depends on various factors, such as:

  1. Your industry
  2. The value of your property
  3. Your location

Insurance companies typically charge more for potentially high-risk industries, therefore your industry greatly impacts the cost of property coverage.

Here is a look at data from Insureon that details the average monthly cost of commercial property insurance by industry, starting with the cheapest:

  • Cleaning services - $30
  • Therapists & counseling services - $45
  • Professional services - $45
  • Healthcare services and professionals - $46
  • Media & advertising - $48
  • IT & tech services - $48
  • Construction & contracting services - $50
  • Architecture & design services - $51
  • Consulting services - $52
  • Landscaping services - $60
  • Professional installations - $63
  • Automotive services - $72
  • Manufacturing - $83
  • Human & social services - $84
  • Retail services - $91
  • Food & beverage operations - $103
  • Wholesale & distribution - $110
  • Sports services & fitness trainers - $146
  • Real estate - $430

Insurance costs are also affected by deductibles and policy limits. You’ll pay more for a policy with a lower deductible or a high coverage limit simply because those factors increase the potential financial risk for the insurance company.

Who needs commercial property insurance?

All businesses that have valuable physical assets or a building to protect should consider having commercial property in place. In fact, some mortgage companies or leasing agencies may require you to have property insurance as part of your contract in an effort to mitigate risk.

That said, here are a few trades that typically purchase commercial property insurance:

Ultimately, most small businesses can benefit from a business property insurance policy.

How does commercial property insurance reimburse you?

When your property is damaged, stolen, or destroyed, your property insurance will pay to repair or replace the property up to the dollar limits stipulated in your policy. Whether you receive a repair or replacement depends on the reimbursement conditions stipulated in your policy. These can be based on the actual cash value of your property or the replacement cost of your property.

In general, a policy that allows for replacement value will be more expensive than one that provides actual cash value as it doesn’t account for depreciation.

Determining your property’s value

Here is a look at how property can be valued for your insurance plan:

1

Actual cash value

The actual cash value refers to how much your property is worth right now – accounting for depreciation since the original date of purchase. For example, imagine a business purchased a commercial freezer two years ago for $6,000, and the insurance provider deems the useful life of the freezer to be 10 years. Upon reimbursement, the freezer that quit working with 80% more useful life in it (10-2). Therefore the cash value for reimbursement by your insurance would be $4,800, which is 80% of $6,000.

See More See Less
2

Replacement cost value

In the previous example of the freezer, the payout was less than the cost of buying a new freezer meaning the business would be left to absorb the cost difference. In the case of Replacement Cost valuation, reimbursements are based on how much it will cost to replace your property, not the current value of the damaged property. For this reason, a policy based on replacement cost value may be a better option. That said, these policies are also slightly more expensive.

See More See Less
3

Fair market value

Fair market value is often used for determining the value of buildings. This method considers what your property might be worth if it wasn’t damaged or lost and you sold it on the open market. When your insurance policy calls for fair market value compensation, a claims adjuster may consider what products are going for on the markets or consult experts about the value. With this method, there is the potential to receive more money than the actual cash value method due to appreciation, but that’s not guaranteed. Fair market value can be subjective and prices also constantly fluctuate.

See More See Less

Other types of insurance to combine with property coverage

We recommend opting for a BOP plan that includes both general liability coverage and property insurance. Apart from this, you may want to bind extra coverage for certain scenarios.

Advertiser Disclosure
BOPs combine general liability & commercial property insurance into a single plan which can be cheaper than buying separate policies.
Examples of coverage:
  • Replacing stolen company equipment
  • Lawsuit from a customer slip & fall accident
Protects businesses from claims of bodily injury, property damage, and advertising injury to third parties such as customers, visitors, vendors, etc.
Examples of coverage:
  • Bodily injuries
  • Repairing/replacing property
  • Libel or slander lawsuits
E&O insurance (a.k.a. professional liability) protects professionals against claims of business negligence, as well as lawsuits resulting from errors or omissions of information offered by company representatives.
Examples of coverage:
  • Legal defense fees
  • Court costs
  • Settlements
This covers employee theft of valuables items or funds. Especially important for businesses that send workers to clients’ homes or businesses.
Examples of coverage:
  • Replacing stolen property
  • Reimbursement of stolen funds
Workers’ comp covers employers and employees from financial losses & liability if they become injured or ill due to work-related causes.
Examples of coverage:
  • Medical expenses
  • Lost wages
  • Legal fees
Commercial property insurance can pay to repair or replace business property, equipment, and merchandise that has been stolen, lost, or damaged –– includes coverage for buildings you rent or own.
Examples of coverage:
  • Merchandise is stolen from your warehouse
Specialized form of commercial property insurance that covers damage, loss, and theft of physical assets held at a business’ primary location –– It does not cover the building.
Examples of coverage:
  • Repair of physical assets
  • Replacement of physical assets
  • Legal fees
Umbrella insurance is a single plan that can flexibly extend general liability, employer liability, & commercial auto insurance limits if you max out on claim limits.
Examples of coverage:
  • Injuries to customers visiting your premises
  • Company auto-accidents & injuries
This covers company vehicles and employees who drive them. Includes coverage for injuries, and vehicle damage, medical payments, collisions, and more.
Examples of coverage:
  • Fixing vehicle after a collision
  • Paying for medical bills of injured occupants
Inland marine insurance covers physical assets like goods and equipment when in transit over land or temporarily stored at off-site locations. It covers movable items not typically covered by standard property insurance.
Examples of coverage:
  • Repair of physical assets
  • Replacement of physical assets
  • Legal fees
Malpractice insurance covers certain healthcare professionals against claims of negligence or business malpractice that results in bodily harm to a patient or client.
Examples of coverage:
  • Legal fees relating to lawsuits
  • Payouts for patient death or injury
Cyber liability insurance protects companies’ data & intellectual property from cyber-related risks such as financial losses caused by cyber-attacks, external data breaches, etc.
Examples of coverage:
  • Forensics investigation
  • Repairs & Recovery costs
  • Legal Defenses
Product liability insurance can cover claims and lawsuits resulting from product defects that cause injury or damage to customers.
Examples of coverage:
  • Customer is hospitalized due to your product
  • Lawsuits from marketing errors
You’ve viewed 6 of 10 categories
LOAD MORE
Discover your ideal policy in minutes Unlock plans from over 30 top providers, now! Suitcase and Shield With Checkmark GET PRICES

FAQ: Commercial property insurance

Is commercial insurance the same as property insurance?

No. Commercial insurance refers to a wide range of policy types that help protect businesses. Property insurance is a specific type of insurance that businesses can purchase to help cover losses if their property is damaged or stolen. Under the umbrella of commercial property insurance, there are numerous types of coverage?you can purchase.

Why is commercial property insurance so expensive?

Not all commercial property insurance is expensive. The cost of this coverage depends on the size of your business, where you’re located, what industry you’re in, and the value of the property you want to cover. It also depends on your policy elections, such as whether you want additional forms of?coverage, high limits, or low deductibles.

About the Author

Sarah Stasik
Sarah Stasik Personal Finance

Sarah Stasik is well versed in personal finance thanks to her previous role as a Revenue Cycle Manager for a Fortune 500 healthcare company. Using her inside knowledge and expertise, Sarah often covers topics ranging from insurance and the economics of private healthcare to personal finance and small business management.

With more than a dozen years of writing experience, Sarah has tackled niches that range from technical advances in fintech to personal budgeting challenges. She has covered topics such as insurance and the economics of private healthcare, small business management and accounting, and credit and savings. Her writing focuses on making complex or seemingly daunting financial topics more accessible and providing helpful and relevant resources for readers.

BACK TO TOP
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news