Commercial Property Insurance in Illinois

Any Illinois commercial real estate is a sizeable asset that should be protected. An important part of protecting the investment is commercial property insurance.

Commercial property insurance provides specialized and customizable coverages for investment properties. Policies may protect businesses against a range of potentially devastating risks.

Most entities owning commercial real estate in Illinois should have business property insurance. Few businesses, firms and individuals could recover from a disaster that causes damage to a building.

In many cases, property owners are required to have a policy that at least meets minimum requirements. Insurance requirements are common in commercial property loans, and a firm's bylaws might require coverage.

Regardless of any requirement or lack thereof, however, coverage is strongly recommended.

Business property policies are readily available for most types of commercial real estate. Owners of retail stores, restaurants, office buildings, multi-unit residential buildings, manufacturing facilities, warehouses, agricultural buildings, and most other types of buildings can easily find coverage. In some cases, policies might cover undeveloped land.

There are a variety of coverages that commercial real estate owners may want. Depending on the specific policy, some important protections might be:

Building Coverage - Usually protects the primary structure located on the insured property, and is often adapted to include any additional structures on the property.

Contents Coverage - Usually protects non-permanent items when at the insured location, such as equipment, product inventory, supplies, furniture, appliances and electronics.

Exterior Signs Coverage - Usually protects unattached outdoor signs. Depending on the policy, such signage might be covered under building coverage or under specific exterior signs coverage.

Tenant Improvements Coverage - Usually protects enhancements or modifications made by tenants within their leased business space. Sometimes called tenant's betterment coverage.

All of these coverages normally protect the specified items against damage and destruction, but exactly what incidents are covered depends on a policy's terms and type. Named perils policies generally offer protection against specified risks that are listed. Open perils policies generally cover risks unless explicitly excluded. Open perils usually provides more extensive protection.

Business property policies primarily cover tangible assets, and not digital ones. While a policy may cover physical computers and servers, the data and programs contained on these are unlikely to be protected.

An experienced insurance agent can usually help find coverage for digital assets if such protection is needed.

When equipment, inventory or products are taken off-site, a business property policy may not protect it. For example, mowers might not be covered when a landscaper takes them to maintain customers' properties. A construction company's equipment might not be covered at a job site, and a distributor's products might not be covered if taking samples to customers.

In these situations, business property usually can be combined with other coverages. A policy that bundles business property insurance with inland marine insurance and/or builders risk insurance, for example, might provide the protection that's needed.

A business that owns multiple properties in various locations can typically cover all of its locations through one business property policy. This is something that a specialized insurance agent, who knows business property policies, can assist with.