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Understanding the Standard Property Policy for Commercial Buildings

TL;DR: If your commercial property doesn’t qualify for a CPP, the Standard Property Policy offers essential coverage for buildings, contents, and common risks.

Main points:

  • CPP may not be available due to building specifics.

  • SPP covers buildings, fixtures, machinery, and materials.

  • Includes coverage for personal, leased, and business property.

  • Excludes items like cash, underground structures, and certain goods.

  • Protects against fire, lightning, and optional added risks.

The popular Commercial Package Policy (CPP) may not be available because of your building’s size, age, construction or its contents. Fortunately, there is an alternative, the Standard Property Policy (SPP) for commercial buildings.

What a Standard Property Policy for Commercial Buildings Covers

Commercial building insurance coverage under the Standard Property Policy (SPP) also includes:

  • Completed additions to commercial buildings

  • Property used for maintenance or servicing (e.g., mowing or painting equipment)

  • Permanent fixtures such as built-in shelving

  • Machinery used in or around the building

The SPP also covers material meant for construction or repairs to a covered building.

Commercial Building Insurance Coverage for Personal and Leased Property

The commercial building standard property policies can cover:

  • Furniture inside the commercial building

  • Fixtures that aren’t permanently attached

  • Machinery and operational equipment

  • Business stock and materials

  • Leased property or tenant-owned property within the building

Further, it also protects personal property of others that is under your care or on or near your insured building

What the Commercial Building Insurance Policy Does Not Cover

Some types of property are excluded. The SPP doesn’t cover money, securities, deeds and similar property. Further, there’s no coverage for:

  • animals

  • illegal goods

  • parts of the building that are below the ground

  • cost of digging or excavating

  • property being transported by sea or air

  • property that’s insured by another policy

There are other items that don’t have SPP coverage, but most are outdoor structures that are beyond the scope of the SPP. Some are items that should have insurance coverage by other types of policies.

Risks Covered by Standard Protection Policies for Commercial Buildings

Commercial building insurance protection and coverage takes care of losses from basic sources such as:

  • fire

  • lightning

  • certain kinds of explosions

Further, you have the option of adding coverage for damage caused by:

  • wind

  • hail

  • smoke

  • aircrafts

  • vehicles

  • hostile mobs

  • sinkholes

  • leaky sprinklers

  • volcanoes

The policy also includes extra coverage to help pay for debris removal and property protection. It can also cover pollution cleanup and fire department service charges.

Why You May Need a Standard Property Policy for a Commercial Building

If you have a commercial building, then you have the need for commercial building insurance for protection. Talk to an insurance professional to see if the SPP is a good way to protect your property.

If you have questions about commercial building insurance call us at 800-392-6532.

This post is for informational purposes. The details and conditions of insurance policies vary. We always recommend speaking with an agent to understand the terms of your existing policies and the policies you plan to purchase.

To consult with an insurance advisor, call 800-392-6532 or email insure@colby-group.com.