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.
What Property Coverage Includes
Buildings
If you own your office, shop, or warehouse, property insurance covers the structure itself. Fire, wind, theft, vandalism, and other covered perils are protected.
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. Worth the premium difference for most 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. Normal wear and deterioration isn't covered. Mysterious disappearance of property isn't covered.
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?
No, flood requires a separate flood insurance policy. Check FEMA maps to understand your exposure.