Does Commercial Property Insurance Cover Off-Site Equipment & Buildings?

As a business owner, you probably know that your commercial insurance can help protect your building, equipment, inventory, and other business property. But there’s an important detail that can easily be overlooked:

Where your business property is located matters.

It can be easy to assume that if you own something for your business, your commercial insurance automatically follows it wherever it goes. Or, if you have an additional shed, garage, storage building, or other structure, you might assume it’s automatically covered along with your main building.

Depending on your policy, that may not be the case.

At Holley Insurance, we want business owners to understand how location and property details can affect their coverage before a loss happens.

Commercial Property Insurance Isn’t the Same as Homeowners Insurance

If you own a home, you may be familiar with homeowners insurance providing some coverage for “other structures” on your property, such as a detached garage or shed, subject to the terms and limits of your policy.

That can lead business owners to assume commercial property insurance works the same way.

Commercial insurance policies don’t necessarily provide automatic coverage for every detached or additional structure you own or use.

Your policy is written based on specific information about your business, which can include the locations and structures being insured.

For example, your business property might include:

• A main office or retail building
• A detached garage
• A storage shed
• A warehouse
• A second office
• A storage unit
• A workshop
• A building you lease or rent

If your business owns, rents, leases, or uses additional locations or structures, make sure your insurance agent knows about them. Depending on the policy and coverage involved, they may need to be specifically listed or otherwise accounted for.

What Happens When Business Equipment Is Stored Somewhere Else?

Here’s another scenario that can catch business owners by surprise.

Imagine you normally keep $20,000 worth of tools and equipment at the business address listed on your insurance policy.

You run out of space, so you move some of the equipment to a storage shed at another property. A few months later, someone breaks into that shed and steals it.

Is the equipment covered?

Don’t assume the answer is yes.

Commercial property policies can have important limitations regarding property that’s away from the insured premises. Coverage can vary based on the policy, where the property is located, why it’s there, how long it’s there, and the type of property involved.

That’s why your insurance agent needs to know when business property is regularly being stored or used somewhere other than the locations contemplated by your policy.

Your Business Changes. Your Insurance Needs to Keep Up.

Business owners make operational changes all the time without necessarily thinking, I should call my insurance agent about this.

You might rent an additional storage unit because you’re running out of space. You might buy a shed for equipment. Your crew might start storing tools at another location. You might lease a second building or move inventory to a warehouse.

From an operational standpoint, these can seem like small changes.

From an insurance standpoint, they can be important.

A simple rule to remember is:

If you add a location, add a structure, or regularly move business property somewhere new, let your insurance agent know.

Your agent can then review your policy and determine whether any changes are needed.

Don’t Wait Until You Have a Claim to Find Out

The worst time to discover a limitation in your commercial insurance policy is after equipment has been stolen, a building has burned, or other damage has already occurred.

Take a few minutes to think about your business today:

Where are your buildings, equipment, tools, inventory, and other valuable business property actually located?

If the answer has changed since your commercial insurance policy was written or last reviewed, it’s worth having a conversation with your agent.

Has Your Business Added a Building, Storage Space or New Location?

At Holley Insurance, we help Virginia business owners make sure their commercial insurance keeps pace with their businesses.

If you’ve added a detached structure, started renting additional space, opened another location, or moved equipment or inventory somewhere new, give our team a call. We’ll review the change and help determine whether your current policy is set up appropriately.

A five-minute conversation today could prevent a very unpleasant surprise when it’s time to file a claim. Get started here.

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