Commercial Insurance For A Business Building In Canada

Are your commercial properties well protected?

Ensuring your commercial properties are well protected requires the advice of a specialized commercial insurance broker. At ALIGNED we want to understand your individual needs in order to tailor your insurance coverage to your particular situation. 

In addition to Commercial General Liability and Commercial Lease Insurance, Boiler and Machinery Insurance ensures you are covered in the event against breakdowns or damage to the equipment that keeps your commercial building running smoothly. 

Your commercial insurance coverage is essential to protecting your business assets against unforeseen circumstances and ALIGNED brokers are experts in navigating the different aspects of commercial insurance for a business property. 

Why does your commercial lease require liability insurance?

When renting your commercial space to other business owners, not only should you as the landlord have general liability insurance but you can also require your tenants to have it in place. As noted, Commercial General Liability insurance protects you as the building owner against claims made by users and tenants of your building for bodily injury and property damage related to your premises, operations, products, completed operations as well as advertising and personal injury liability. Typical claims include slip and fall incidents, as well damage to your property by unforeseen circumstances like floods and fires. As a commercial landlord, you have the duty to make your property safe for your tenants and others that might access your property. 

Your commercial lease also requires liability insurance to ensure that you won’t have to cover the cost of a claim for an accident or injury that might occur as a result of your tenant’s business. Lost income due to a tenant’s inability to pay for whatever reason could be another aspect of your commercial lease insurance. Tenants should also be covered for any damage they might cause to the building they lease from you. 

Some examples of situations when tenant insurance is key include: 

  • A tenant’s customer is injured by a retail display toppling over in their commercial space and makes a claim for bodily injury.
  • A tenant of yours is remodelling a commercial space and damages the HVAC to the entire building resulting in lost rental income.

How much is commercial insurance for a business building?

Price matters. This is why we are often asked about the specific costs associated with the many commercial insurance products and services we offer. In fact, “How much is Commercial insurance for a business building?” is a common question that our expert commercial insurance brokers are frequently asked. And this is why we’ve written this useful article.

You might currently have commercial insurance for your business building. Or you may be looking for the best commercial insurance for a business building. Or perhaps you are considering buying a business building and would just like to understand the cost of insuring it. As commercial insurance experts, ALIGNED insurance brokers are happy to help!

Our ALIGNED insurance brokers help clients across Canada with commercial insurance for a business building. Our insurance brokers in Vancouver, Calgary, and Toronto are supported by our National Operations headquarters in Cambridge, Ontario.

Regardless of the size and occupancy of your business building, ALIGNED can help you secure multiple commercial insurance quotes. We work with more than 65 of Canada’s top insurance companies and are completely independent insurance brokers who represent you and your business.

Commercial Insurance For A Business Building Explained

To determine how much is commercial insurance for a business building in Canada is needed, a number of things need to be considered.

Types of commercial insurance for a business building:

There are 3 primary and individual business insurance products that make up commercial insurance for business building which are:

  • Commercial property insurance pays to repair or replace the property that was damaged or destroyed by perils like fire, flood etc.
  • Commercial general liability insurance which primarily is slip and fall insurance is designed to cover the building owner from allegations of negligence resulting in injury.
  • Machinery breakdown insurance is specialized insurance coverage that effectively provides HVAC insurance and electronic equipment insurance for a unique set of perils like electrical arcing, power surges etc.

Each of the above commercial insurance products for a business building are priced separately and on different parameters which are further explained below.

How these insurance products are priced

Commercial property insurance pricing and machinery breakdown pricing are primarily based on the total insured value of the commercial property being insured. This includes everything from the building to the improvements and betterment’s to contents. The amount of rental income is also a considerable pricing factor for commercial property insurance if a building business owner chooses to insure it.

Meanwhile, commercial general liability insurance is priced primarily on the revenue generated by the business operations, but factors such as a number of locations, type of business building (i.e. strip mall vs. multi-storey) are also relevant.

Why is the value of the building important?

Your property insurance policy is based on the value of your commercial building, so it is the largest determining factor for your insurance coverage. When calculating your coverage, the replacement cost value of the building is considered, as is its actual cost value. Your policy should provide the replacement cost of the building using similar materials to rebuild it but without considering depreciation. Your insurance policy will consider what the total replacement cost of your building is and subtract the actual cost value, which refers to the value of your property when it is damaged or destroyed. 

Your policy requires you to share the cost of covered services up to a moderate percentage of the actual cash value of the property, thereby allowing you to recoup full coverage for any losses. Without this coverage, you would have to pay a percentage of all losses even when they are listed in the policy. 

In depth | Understanding Canadian property insurance terms and coverage options

Providing relevant insights is just one of the ways we deliver a different experience to our clients across the country. Below, please find excerpts from three of our informative Business Insurance Products webpages that we’ve created about specific risks associated with business buildings.

ONE | Property Insurance 101: Replacement Cost Value vs. Actual Cost Value

A typical property insurance policy will provide the replacement cost value for your building and the actual cash value for your business property. Here’s what these terms mean:

  • Replacement cost value is the amount that is necessary to replace or rebuild your building or repair damages with similar materials, without considering depreciation.
  • Actual cost value is the value of your property when it is damaged or destroyed. This amount is typically determined by subtracting the depreciation from the replacement cost value.

The coinsurance clause requires you, the policyholder, to share the cost of covered services up to a moderate percentage of the actual cash value of the property.

TWO | Why is general liability insurance so important?

Commercial General Liability Insurance (CGL) protects against liability claims for bodily injury and property damage related to your premises, operations, products, completed operations as well as advertising and personal injury liability. A few examples:

  • A customer slips in your retail store and breaks their hip.
  • A contractor accidentally damages the building next to the one they are working on.
  • A plumber installs a new toilet that leaks and damages the contents of the room below.

THREE | What is boiler and machinery insurance?

The International Risk Management Institute (IRMI) notes that an object is

“a boiler and machinery (BM) insurance term for equipment or machinery. BM coverage applies to losses or damages resulting from an accident (such as a breakdown or explosion) to a covered object.” 1

ALIGNED Insurance: Equipment Breakdown Insurance: Boiler and Machinery

There are several examples of an object that could be covered under a boiler and machinery or equipment/machinery breakdown insurance policy. Some objects include a rooftop HVAC unit, manufacturing equipment, a pressure vessel or the actual boiler itself.

Let’s talk about commercial insurance for your business building

We understand that price matters when you are looking for commercial insurance for a business property.  ALIGNED works with Canada’s top insurance companies to provide custom insurance packages at affordable prices. Click Here To Get A Quote or contact one of our business insurance experts for information or with any questions you may have.

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