Insure the assets the business needs to operate
Commercial property insurance can cover buildings and business property against insured causes of loss. Depending on the policy, that property may include equipment, furniture, stock, computers, tenant improvements, outdoor signs and customer property in the business’s care.
Coverage is not identical across policies. A named-perils form covers listed causes of loss, while a broader form covers direct physical loss unless excluded, subject to all terms and limitations. Neither form covers every event.
Separate the property into useful categories
Build a location-by-location statement of values for:
- Buildings, additions and detached structures
- Leasehold or tenant improvements
- Furniture, fixtures, computers and production equipment
- Stock, raw materials and finished goods, including seasonal peaks
- Property off premises, in transit or at temporary locations
- Tools and mobile equipment used at customer sites
- Property belonging to customers or employees
- Debris removal, professional fees and bylaw-related rebuilding costs
Clarify who must insure improvements and equipment under each lease. Landlord coverage does not automatically protect a tenant’s property or income.
Valuation and policy conditions affect the settlement
Replacement cost, actual cash value and other valuation bases can produce different claim outcomes. Building estimates should reflect current construction, demolition, professional fees and code requirements—not the market value or tax assessment. Contents values should reflect the cost to replace equipment and stock on the required basis.
Co-insurance clauses, stated amounts, deductibles and reporting conditions can reduce recovery when values are understated or records are incomplete. Keep inventories, photos, receipts and off-site backups of essential records.
Review causes of loss and extensions explicitly
Ask how the proposed form treats sewer backup, overland water, earthquake, flood, equipment breakdown, crime, glass, utility interruption and vacant or unoccupied premises. Some are excluded, optional or subject to sublimits. Maintenance, wear and tear, gradual deterioration and faulty workmanship are also commonly restricted.
Property coverage pays for insured physical loss; it does not by itself replace income during shutdown. Coordinate it with business interruption insurance and equipment breakdown coverage.
Update values when the business changes
New locations, renovations, equipment purchases, increased stock, changed occupancy and extended vacancy can affect coverage. Contact Westoak with the leases and current statement of values so the available property forms, deductibles and extensions can be compared on the same facts.