Along with determining the different types of insurance that you need in order to protect your business and property, it is also important to accurately asses

s the amount of insurance coverage that you need. Figuring out how much insurance coverage that you need for your commercial property can be a bit of a balancing act.

On one hand, you certainly want to ensure that you have enough coverage. At the same time, it’s important to understand that too much coverage can also be problematic. Overspending on insurance coverage can add up quickly and detract from funds that could be spent elsewhere on your business.

Insurance policies are available in a variety of options and coverage can range from the basics, such as fire and vandalism, to broader coverage. The specific amount of coverage that you need for your building may vary based on your business and your specific needs.

In determining the amount of coverage that you need for your commercial building, it’s important to understand that there’s a difference between the value of your building and the replacement cost. Full value refers to the total amount it would cost to rebuild your building at prevailing costs. You must always consider whether you would be able to rebuild your building for the amount at which it’s insured, considering the increased costs for labor and materials.

Make sure that you have sufficient insurance coverage to actually cover the replacement cost for your building.

Remember, the amount that you originally paid for your building may not be enough to cover replacement costs if your building is lost due to fire or some other type of unfortunate circumstance. Insurance coverage for replacement value is usually more than the coverage for actual value. While it’s always important to consider your budget, you also need to think about whether you would be fully protected if your building were to be lost.

As part of the process of determining whether you have a sufficient amount of coverage, consider whether your policy will protect you only if your building is damaged or if it will also provide you with liability coverage in the event of an injury incurred on your property. These types of occurrences typically have separate limits.

It’s also important to make sure that you’re aware of your lender’s limits. If you have a loan on your property, you will usually be required to maintain a certain amount of insurance coverage per your loan agreement. If you fail to maintain the required amount of coverage, your lender may be able to exercise the right to foreclose on the property.

By making certain that you have sufficient building insurance coverage, you can ensure that you are protected without paying more than is necessary. Evergreen Insurance offers a variety of commercial building insurance options. Contact one of our representatives today to learn more about our available insurance products.