Types of Commercial Property Insurance (2026)

Reimburses repair or replacement costs for the physical structure, including walls, roofs, floors, and permanently installed systems. Coverage triggers when a named peril (fire, wind, vandalism, burst pipes) damages the building.

Standard for building owners. Tenants typically don't need it unless their lease requires it or they've made permanent improvements ($50-$150/sq ft for build-outs). Triple-net (NNN) leases sometimes require tenant building coverage.

Reimburses loss or damage to equipment, inventory, furniture, tools, and supplies you own. Your landlord's insurance covers the building structure, not your contents, even if building plumbing caused the damage.

Most policies only cover property within 100 feet of the premises. Offsite or job site equipment typically needs inland marine coverage. Set limits at replacement cost during peak inventory, not average stock.

Replaces lost net income and covers continuing fixed expenses when covered property damage forces temporary closure. Requires physical property damage to trigger; economic slowdowns, pandemics, and supply chain issues don't qualify.

A waiting period (often 24-72 hours) applies before coverage starts. A restoration period cap (often 12-18 months) limits how long payments continue. Calculate your limit as: (monthly net income + monthly fixed expenses) × expected recovery months.

Reimburses additional costs to keep operating after property loss: temporary space ($3,000-$15,000/month), equipment rental, expedited shipping, overtime labor.

Often included as a sublimit within business interruption. Service businesses often lose 20-40% of customers during 60+ day closures, making temporary operations worthwhile. If relocation isn't feasible due to licenses or non-portable equipment, allocate budget toward higher BI limits instead.

Covers rising water, storm surge, and overflow that standard policies exclude entirely. Purchased separately through NFIP or private insurers. NFIP limits: $500,000 building, $500,000 contents. 30-day waiting period applies.

About 25% of flood claims come from outside high-risk zones. FEMA maps don't always capture urban drainage issues. Basement contents often have lower sublimits or exclusions.

Covers structural damage and contents loss from seismic events that standard policies exclude. Deductibles are typically 10-20% of coverage amount (not flat amounts). A $1M building with 15% deductible means $150,000 out of pocket before coverage pays.

Primarily protects against total or near-total loss, not moderate damage. California has 90%+ probability of a 6.7+ quake within 30 years. Tenants typically don't need building earthquake coverage but may want contents protection.

Pays for code upgrades required when repairing or rebuilding damaged property. Standard policies restore buildings to pre-loss condition, not current codes.

Most jurisdictions require full code compliance when repairs exceed 50% of building value. Upgrades on pre-1990 buildings commonly reach $50,000-$150,000: electrical ($15,000-$50,000), sprinklers ($30,000-$70,000), ADA ($10,000-$50,000). Coverage costs approximately $300/year.

Pays for mechanical and electrical equipment failures that standard policies exclude as wear and tear. Covers breakdowns from mechanical failure, electrical surge, motor burnout, or operator error.

Restaurant refrigeration failure alone can cost $5,000-$15,000 in repairs plus $20,000-$100,000 in spoiled inventory. Many policies include spoilage and BI triggered by equipment failure. Relevant for restaurants, manufacturers, medical practices, and data centers.

Extends protection for theft, fraud, and employee dishonesty beyond standard policy limits. Includes burglary, robbery, employee theft, forgery, and certain fraud schemes.

Employee theft median loss: $50,000. Social engineering fraud (fake invoices, wire transfer scams) often excluded and requires specific endorsement. Evaluate if you handle $5,000+/month cash, valuable inventory, or wire transfers.