What is covered by a Florida commercial building and property insurance policy?
In Florida, commercial building and property insurance protects business owners from losses due to physical damage to property or equipment and as a result of theft. For insurance purposes, a
business’ property includes the physical building in which it resides, as well as its other assets. In Florida the following, owned or leased, can be considered business property:
- The actual building
- Furniture, equipment and supplies
- Computers and other data processing equipment
- Valuable papers, books and documents
- Television sets, VCRs, DVD players, satellite dishes
- Signs, fences and outdoor property not attached to a building
- Non-tangible items such as trademarks and copyright
What types of additional insurance coverage is available on a Florida commercial building and property insurance policy?
There are three types of Florida commercial building or property insurance plans:
- Basic form, which includes losses resulting from a fire, lightning, windstorm, hail and explosion, plus the cost of removing property to protect it from further damage.
- Broad form, which includes basic plus extended coverage for other types of perils, such as a roof collapse (e.g. caused by snow or ice), riot and civil commotion, etc.
- Special form, which includes basic and broad, and covers all direct physical losses except conditions specifically excluded as listed in the policy.
What might not be covered by Florida commercial building and property insurance policy?
- Business Interruption/Continuation Insurance. This type of insurance covers lost earnings due to a circumstance covered by one of the property insurance plans you purchased, such as a fire
or theft that shuts down your business for an extended period of time. Business interruption/continuation insurance covers expenses associated with running a business, such as payroll and utility
bills, based on the company’s financial records.
- Glass Coverage. You may endorse a policy to add coverage for glass damage.
- Food Spoilage. In restaurants and convenience stores, food spoilage can be added by endorsement to the property coverage.
What factors affect my Florida commercial building and property insurance premium?
- Building Construction Type. Non combustible buildings receive the highest discount as they have the highest fire rating. Masonry construction costs less to insure than frame due to the fire
ratings between the two.
- Year Built. Newer construction buildings are typically less to insure as more stringent building codes will qualify for certain discounts. Adversely, older buildings tend to cost more to
- Location. If your building is located within 5 miles of a fire department and withing 1,000 feet of a fire hydrant you will pay less than if the fire department and fire hydrant are further
- Alarm. A monitored alarm system will typically qualify for a discount.
What else should be considered when purchasing Florida commercial building and property insurance?
- It’s important to have your Florida commercial property value assessed before, and periodically thereafter, any type of Florida commercial building or property insurance coverage is purchased. Be
sure to keep copies of receipts for equipment, furniture and other valuable items in the event your premises are destroyed. Keep physical photos of your property in another location as well as
digital pictures that you store on your computer or with a Web service.
- High-value specialty items, like antiques and artwork, should also be assessed by a reputable appraiser before you buy property insurance. These types of items are usually covered for an
agreed-upon amount before a policy is written. It is important to specifically tell your agent about these specialty items so that the correct coverage is provided.
- If you lease your Florida building or office, do not rely on your landlord to provide coverage for your commercial business property. The building will typically provide insurance only for the
basic structure and common areas. Read your lease carefully, there may be other requirements or penalties in the fine print. Check to see what is and is not covered so that you are fully protected if
something happens to your property and equipment or if someone decides to sue you for damages caused by you or one of your employees.
- A Florida commercial building or property insurance policy generally includes a statement specifying the limit of liability. Be sure you understand how it works. The limit of liability is defined
as the maximum amount an insurer will pay for a covered loss. Typically, the insurer will bear responsibility up to a certain limit, as stated in the policy, with the policyholder liable for amounts
above that limit.
- Costs for business interruption coverage are tied to the type of business you operate. For example, less business interruption coverage would be needed following a fire at a travel agency versus
an art gallery, assuming that it would take more time for an art gallery to recover from a fire.
- Even if you purchase business interruption coverage, make sure you have sufficient funds to tide you over the first few days. This type of coverage typically doesn’t kick in for a specified time
period after a disrupting incident occurs. The time period will be listed in your policy.
Some insurance companies include flood coverage in their commercial property
policies for areas with a low flood risk. However, most flood insurance is
available only through the National Flood Insurance Program (NFIP). Some
insurance companies may provide flood coverage in addition to NFIP coverage.
To qualify for NFIP coverage, your business must be located within an
NFIP-participating community. These communities have adopted federal building
and floodplain management programs to reduce the likelihood of flood damage.
Special flood hazard areas are areas within NFIP communities that are at high
risk for flooding. NFIP requires all structures within these areas to have flood
Note: More 25 percent of all floods in the United
States occur in areas designated as low-to-moderate risk. You should consider
flood insurance even if your business is outside a hazard area.
Schedule a consultation today to pinpoint how best to protect your commercial real estate.
Serving all of Florida, including Tampa, St Petersburg, Orlando, Jacksonville, Miami, Tallahasse, Fort Lauderdale, Fort Myers, Cape Coral, Pembroke Pines, Dade City, Wesley Chapel, Zephyrhills
Source: The Florida Department of Financial Services Library
Disclaimer: This is only an example of how coverage could apply and does not represent any guarantee of coverage. This site contains general information relating to Florida commercial building and
property insurance and is not intended to be a substitute for the law.