When it comes to protecting your business, choosing the right insurance coverage is crucial. The nature of your business premises, whether rented or owned, significantly impacts the type of insurance you need. The David Nelson Agency, committed to serving the Chicagoland community and Illinois at large, provides insights into the different business insurance needs based on whether a company rents or owns its place of business.
Insurance Needs for Rented Business Spaces
General Liability Insurance
General liability insurance is fundamental for businesses operating in rented spaces. It provides coverage for third-party claims of bodily injury, property damage, and advertising injury. This protects your business from potential legal and financial implications arising from accidents or incidents on the rented premises.
Tenant’s Improvements Coverage
This insurance covers improvements or alterations made to the rented space, ensuring they’re protected in case of damage or loss. It’s crucial to secure this coverage, especially if you’ve invested in customizations to meet your business requirements.
Business Interruption Insurance
Business interruption insurance compensates for lost income and operating expenses when your business operations are interrupted due to a covered peril. It ensures financial stability during the recovery phase after an unexpected event.
Contents and Inventory Insurance
Protecting your business assets, including equipment, furniture, inventory, and supplies, is vital. Contents and inventory insurance covers these assets against perils like fire, theft, or vandalism. Does that sound excessive? Think about the fact that businesses filed claims for more than $220 million in 2022.
Loss of Use Coverage
In the event that the rented space becomes temporarily uninhabitable due to a covered peril, loss of use coverage helps cover additional expenses such as rent for a temporary space, allowing your business to continue operations during the recovery period. It may also be referred to as loss of income coverage.
Cyber Liability Insurance
Wait, what? You’re telling me cybersecurity-related concerns can be baked into insurance policies, even if you’re renting? Yes, absolutely. Your coverage is not necessarily tied to ownership
Insurance Needs for Owned Business Spaces
Property Insurance
For business owners who own their premises, property insurance is paramount. It covers the physical structure, equipment, inventory, and other assets against a range of perils such as fire, theft, vandalism, or natural disasters. How covered you end up in Chicagoland and Illinois at large depends significantly on who you contact (pro tip: contact us).
Building Ordinance Coverage
In the event of damage, building ordinance coverage helps cover the additional costs of rebuilding to comply with updated building codes and ordinances. At one point, this was considered a luxury form of insurance. But in a world where science has pushed us to finally incorporate environmentally friendly standards, this particular form of insurance has become more important.
Equipment Breakdown Coverage
Owned business spaces often have specialized equipment critical to operations. Equipment breakdown coverage provides protection against the costs of repairing or replacing this equipment in case of breakdowns. This is uniquely relevant for factories.
Liability Insurance
While liability coverage is essential for all businesses, owning the premises might require additional coverage due to increased risk. Umbrella liability insurance provides an extra layer of protection beyond the limits of standard liability policies.
Flood and Earthquake Insurance
Depending on the location of the business, additional coverage for perils like floods and earthquakes might be necessary, especially in areas prone to such natural disasters. In Illinois and Chicagoland, flood insurance can be especially important. Most of the state is built on marshland.
Business Income and Extra Expense Coverage
This insurance compensates for lost income and additional expenses during the restoration period after a covered loss, enabling your business to recover without significant financial strain. Companies have keenly learned the impact of unexpected business impact in the wake of COVID. An extra layer of coverage in the wake of such a global event can protect you before it becomes a problem.
Do I REALLY need it?
Listen. Whether you rent or own the property from which you do business, insurance keeps you safe. So you have a choice: skimp on upfront costs and gamble on ultimate expenses when things inevitably go sideways, or decide to protect yourself and your company should the worst come to pass.
That choice is up to you. But The David Nelson Agency is ready to help when you make that call.