Commercial property insurance.

What a lease requires you to insure is spelled out in its insurance clause, and it is usually three things: your contents and equipment, the improvements you paid for inside the landlord’s building, and liability coverage with the landlord named as an additional insured. A retail lease on a shop, for example, often asks for a certificate before the keys are handed over and again each year. The building itself is the landlord’s policy. What changes the answer is the lease itself, because some shift glass, heating equipment, or a share of the building premium to the tenant, so we read that clause with you before you sign.

Replacement cost or actual cash value is the choice that decides what a property claim actually pays. Replacement cost pays what it takes to buy new at today’s prices. Actual cash value pays that amount minus depreciation, so an old compressor is paid at what an old compressor is worth. After a shop fire, that difference is the gap between rebuilding and settling for less. Most businesses that can qualify choose replacement cost and pay a little more for it. What changes the answer is the age and condition of the building and equipment, because carriers set limits on what they will write at replacement cost.

Flood is generally not covered by a commercial property policy. Rising water from outside the building is excluded on almost every standard form, and it is insured separately through the federal flood program or a private flood policy. Water from a burst pipe inside the building is a different cause and is usually covered. A shop in a mapped flood zone whose lender requires flood coverage is the common case, and a shop outside the zone can still buy it. What changes the answer is where the building sits and how the water got in, so we check the flood zone before quoting property.

Tools in the van are generally not covered by the commercial property policy, because property coverage stops at the building’s walls or a short distance beyond them. Gear that lives in the van, sits on a jobsite, or moves between the two belongs on a tools and equipment policy, sometimes called inland marine. If the storeroom is emptied overnight, the contents policy replaces the stock inside, and the drills in the vans parked outside are a separate claim. What changes the answer is how far from the building the gear usually is, which is why we ask where the tools sleep before placing property coverage.

Coinsurance is a clause in most property policies that asks you to insure the building and contents to a set share of their full replacement value. Insure them for less than that share, and the carrier reduces every claim payment in proportion, even a small one. A shop insured for half of what it would cost to rebuild can see a claim for a single damaged bay cut by the same half. The point is to keep values honest. What changes the answer is whether your values are current, which is why we update them when you buy equipment and not at the claim.

The property policy itself does not cover the income lost while you rebuild. That is business income coverage, a separate part that is often written alongside property and sometimes packaged with it. When a fire takes the back half of the shop, property pays to rebuild and replace the contents, and business income helps carry payroll and rent for the weeks the doors are closed. Without it, the rebuild is paid for and the bills are not. What changes the answer is whether business income was added to the policy and how long the restoration period runs, both of which are set when the policy is placed.