Protecting Your Home Base
Most contractor work happens at customer locations, but your office, shop, equipment yard, and stored materials need protection too. Commercial property insurance covers these fixed-location assets. Equipment and tools that travel to job sites are a different coverage; see inland marine vs. builder's risk.
What Property Coverage Includes
Buildings
If you own your office, shop, or warehouse, property insurance covers the structure itself against fire, wind, theft, vandalism, and other covered perils.
Business Personal Property
Office furniture, computers, reference materials, and files. Shop equipment and tools kept at your location. Inventory and materials in storage.
Outdoor Property
Fencing and signage. Equipment stored in yards. Site improvements you've made.
Contractor-Specific Considerations
Equipment Yards
Many contractors store heavy equipment and materials outdoors. Standard property policies may not adequately cover outdoor storage. Security measures like fencing and cameras affect coverage availability. Higher deductibles often apply to outdoor property.
Shop Operations
If you fabricate in a shop before installing at job sites, coverage needs include fabrication equipment, materials in process, and business interruption if the shop becomes unusable.
Leased Spaces
Understand the difference between your landlord's insurance and yours. The building owner's policy covers the structure. Your policy covers your contents and improvements you've made. Liability coverage is separate from property coverage.
Coverage Options
Named Perils (Basic Form)
Covers only specifically listed perils like fire, lightning, explosion, windstorm, and hail. Cheaper but less comprehensive.
Broad Form
Adds additional perils including falling objects, weight of ice and snow, and certain water damage. Middle ground between basic and special.
Special Form (Recommended)
Covers all perils except those specifically excluded. Broader protection with fewer gaps. Usually worth the premium difference for contractors.
Business Interruption
If your facility is damaged and you can't operate normally, business interruption coverage replaces lost income. Extra expense coverage pays for temporary facilities and expedited repairs. This protection can keep you solvent while recovering from a major loss.
Common Exclusions
Flood requires a separate policy. California has flood risk in some areas, so check your exposure. Earthquake is a significant concern in California and requires a separate endorsement or policy. Normal wear and deterioration isn't covered. Mysterious disappearance of property is commonly excluded.
A 2026 Note on Wildfire and Values
In wildfire-prone areas, especially in California, property coverage has become harder to place and more expensive, and some businesses have turned to surplus lines carriers or the California FAIR Plan for part of their coverage. Start renewals early if your shop or yard is in a high-risk area, and make sure your building and equipment values reflect current replacement costs, which have risen with material prices. Our renewal tips cover the timeline.
Valuation Methods
Replacement Cost
Pays to replace property without deducting for depreciation. Better protection. Higher premium. Worth it for most situations.
Actual Cash Value
Replacement cost minus depreciation. Lower premium, but you'll receive less when claims occur. Older property may not get replaced at ACV values.
Common Questions
What about equipment at job sites?
That's inland marine coverage, not commercial property. Property insurance covers items at your fixed locations.
Do I need property insurance if I rent my office?
Yes, for your business personal property. The landlord's insurance covers the building structure, not your contents, improvements, or business interruption.
Is flood damage covered?
Not under a standard commercial property policy. Flood requires a separate flood insurance policy. Check FEMA maps to understand your exposure, and ask us for a quote that includes the flood and earthquake options available at your location.