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What is Building Insurance?

Malcolm Tatum
Malcolm Tatum
Malcolm Tatum
Malcolm Tatum

Building insurance is insurance coverage that protects a property owner should events take place that lead to damage to the insured structure. Individuals and businesses that own office buildings, plant facilities, or rental properties where the building is leased out to others often find that buildings insurance is a very wise investment. The coverage remains in effect until the property owner chooses to sell the property. At that point, the new owner is responsible for purchasing and maintaining building insurance.

With both home and commercial building insurance, the owner of the structure is protected from a wide range of potential threats. The terms and conditions of the home building insurance policy usually cover natural disasters such as floods, hurricanes, tornadoes, or landslides. Landlords of rental properties also enjoy these same types of coverage, as well as protection from damage to property that renders the some area of the building unfit for leasing or renting.

Building insurance may cover losses from natural disasters, like hurricanes, but not all policies do.
Building insurance may cover losses from natural disasters, like hurricanes, but not all policies do.

The exact scope of protection provided by the building insurance coverage will depend on a number of factors. The physical location of the property will be a major factor in what types of protection are included in the policy. For example, it may be difficult to obtain coverage for flooding when the building is located in a known flood plain. If the coverage is available, it is often at a higher premium, since the location would classify the property as a higher risk.

With both home and commercial insurance, the owner of the structure is protected from a range of potential threats.
With both home and commercial insurance, the owner of the structure is protected from a range of potential threats.

Current market value of the building will also play a role in determining the amount of building insurance coverage that is required. The idea is to make sure the coverage is adequate to allow the owner to restore the property to a condition where it can be used for its intended purpose. That means the coverage should be sufficient to allow the owner of rental property to repair or rebuild the damaged structure in order to make it possible to lease space in the building once more.

Property owners are protected by building insurance when they lease to commercial businesses.
Property owners are protected by building insurance when they lease to commercial businesses.

When attempting to obtain a business insurance quote, it is a good idea to speak with several different providers. This allows the property owner to compare rates as well as coverage amounts. At the same time, the owner may be advised of improvements or safeguards that would make it possible to obtain more coverage for a smaller premium. Buildings equipped with up to date security systems, for example, are much more likely to qualify for coverage than buildings with no type of security in place. When the owner becomes aware of these types of improvements, it is often cost-effective to implement the enhancements, then reapply for the coverage at a lower premium.

Malcolm Tatum
Malcolm Tatum

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including WiseGEEK, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

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Malcolm Tatum
Malcolm Tatum

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including WiseGEEK, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

Learn more...

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    • Building insurance may cover losses from natural disasters, like hurricanes, but not all policies do.
      By: Brian Nolan
      Building insurance may cover losses from natural disasters, like hurricanes, but not all policies do.
    • With both home and commercial insurance, the owner of the structure is protected from a range of potential threats.
      By: Christian Delbert
      With both home and commercial insurance, the owner of the structure is protected from a range of potential threats.
    • Property owners are protected by building insurance when they lease to commercial businesses.
      By: Andy Dean
      Property owners are protected by building insurance when they lease to commercial businesses.
    • A home building insurance agreement may cover damage caused by flooding.
      By: Ronald Hudson
      A home building insurance agreement may cover damage caused by flooding.