Commercial Real Estate Insurance in Massachusetts

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Commercial Real Estate Insurance 
in Massachusetts

What is commercial real estate insurance?

Commercial real estate requires a large upfront investment, and that investment should be protected whenever possible. One way that real estate investors in Massachusetts can protect their properties and investments is by purchasing commercial real estate insurance.

Commercial real estate insurance provides tailored coverage for investors who have commercial properties. Policies may insure land, buildings or other properties that investors have.

Commercial Real Estate Insurance Massachusetts
Commercial Real Estate Insurance Massachusetts

What investors in Massachusetts should be carrying commercial building insurance?

Most investors and businesses that own commercial real estate in Massachusetts should have commercial building insurance. Not insuring may violate contracts, and leave investors exposed to major risk.

In many cases, insurance isn’t optional for commercial real estate. Lenders and other parties may insist that insurance be carried, so the investment is protected even if something happens to the building that’s insured.

Regardless of any third-party requirement, however, insurance is strongly advised for almost all commercial properties in the state,

What sorts of properties can commercial building insurance cover?

Commercial building insurance is available for almost all types of properties that investors might hold. An insurance agent who knows these policies well can likely find options for multi-unit residential buildings, office buildings, shopping centers, entertainment venues, factories, industrial buildings, mixed-used spaces, and still other properties.

In addition to insuring buildings, policies are also available for undeveloped land. It’s important to make sure that a policy is suited for insuring raw land, though, as the coverage needs for land and for buildings differ.

A knowledgeable insurance agent can help investors and businesses find the right policy for their type of property, whatever that might be.

What protections are included in commercial building insurance policies?

Coverage specifics can vary some between policies, but most commercial building policies offer protections like the following:

  • Commercial Property Coverage: May cover buildings and other structures against potential damage or loss. What perils are covered could be based on a predefined list of threats (closed perils policy), or encompass all risks unless explicitly excluded (open perils policy).
  • Commercial Contents Coverage: May cover non-permanent items kept at the insured property’s location. What’s covered could include tools, equipment, inventory, supplies, fixtures, appliances, electronics and more.
  • Premises Liability Coverage: May cover common accidents, such as slips and falls, occurring on the business property. What’s covered could include third-party injuries (typically more frequent) or damage to a third party’s property (typically less frequent). Protection is often limited to the insured location.

Most of these policies are written so that any improvements made to a property are included within the policy’s coverages. Improvements would normally be treated much like any other covered item under either property coverage or contents coverage. 

Do home-based businesses require a commercial real estate policy?

While there are some insurance protections to be aware of when running a home business, home-based businesses usually don’t need a complete commercial real estate policy.

There’s usually an option within homeowners policies to add coverage for a home business. This could be included as a standard feature, or might be added as an optional coverage or endorsement.

Commercial Real Estate Insurance Massachusetts

How are the premiums for commercial real estate policies calculated?

Multiple factors influence the cost of insuring a commercial property. Some key ones are:

  • Location: A property’s location can affect its vulnerability to theft, vandalism, natural disasters, etc. The distance from a fire state can also have an impact.
  • Size: The size of a property impacts its current value, and how much it’d cost to rebuild the property. Both of these factors have a direct impact on property coverage costs. Building size is usually measured in square feet, and undeveloped land in acres.
  • Value: Higher-valued properties typically require more insurance and higher limits, thereby normally causing rates to increase as the value does.
  • Structures: The number and type of other structures on a property impact rebuilding costs and overall value. Properties with more structures and more complex structures will likely cost more to insure.
  • Use: Properties that are heavily used may cost more to insure than those that are less frequently used. Certain high-risk activities could also increase premiums.

An independent insurance agent can help investors find out how much insuring their property will cost.

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How can investors get commercial real estate insurance in Massachusetts?

For help insuring a commercial property that’s in Massachusetts, contact the independent insurance agents at Platinum Insurance. We’ll make sure you find commercial real estate insurance that’ll protect your property well.