What is Covered by Business Hazard Insurance?
If you know anything about insurance, you know that hazard insurance is an important part of protecting your home against structural damage like fire and theft. In other words, hazard insurance (also called property insurance) is a policy that protects your business property from fire, certain natural disasters, and other covered causes of loss. It can be added to or included in a comprehensive policy or as a stand-alone policy. But how can you protect your business? Is there risk insurance for the business?
Yes! Just as hazard insurance protects the structure of the building where you live, there is also hazard insurance that protects the structure of the building where your business is located. Commercial hazard insurance, sometimes called commercial property insurance or business property insurance, protects against property damage caused by many of the same sources that building insurance covers.
What does Professional risk Insurance cover?
Commercial buildings face the same risks as residential buildings, so commercial hazard insurance is designed to protect against many of these risks. Both types of risk insurance generally cover fire, theft, lightning, explosions, and vehicle damage. Business hazard insurance can also protect against damages more common in commercial spaces, such as water damage caused by sprinkler systems.
Business hazard insurance covers direct physical damage caused by a number of unforeseen circumstances, including:
- Lightning
- Wind
- Snowstorms or hail
- Fire
- Blast
- Water damage
- Vandalism and theft
- And more
Do you need professional hazard insurance to apply for an SBA loan?
Are you building your business from scratch? Purchasing hazard insurance for an SBA loan may be more important than you think. If you are seeking an SBA loan for your growing business, you will need to prove that you have hazard insurance for a small business that covers the loan. Like most lenders, the Small Business Hazard Insurance Administration (SBA) wants to verify that the assets it finances are protected.
Why does the SBA require hazard insurance on EIDL loans?
The SBA requires certain EIDL loans to carry hazard insurance to protect its own loan guarantee. This is a last resort; other insurance will suffice.
Hazard insurance is required for loans over $25,000, and real estate is the preferred collateral. For loans of $200,000 or less, a business owner does not have to use their primary residence as collateral if it is determined that the owner has other assets of equal quality and value equal to or greater than the loan amount.
Alternatively, specialty property insurance on the building or specialty property can be used as collateral.
Do domestic businesses need risk insurance?
What happens if your home and business are in the same location? Your standard homeowners insurance policy includes hazard coverage to protect your business against various risks. This standard of protection can even cover commercial property worth around $2,500. But be sure to read your policy to be sure. If your home business requires more physical capital, you may need to purchase additional insurance.
How much does professional risk business hazard insurance cost?
It depends on the type of business you have. The more valuable your property is, the more expensive your risk insurance will be, and vice versa. For example, a manufacturing plant with millions of dollars worth of equipment will pay more for hazard insurance than a smoothie shop. As your business grows, it’s important to continually reassess the value of your property so your insurance continues to protect everything.
How to get commercial risk insurance?
Insurancepanel offers business insurance plans tailored to your business needs. Call 1-888-490-1549 for a free quote from insurancepanel in USA or find an independent agent in your area today to learn how the right coverage can protect your business.
Why choose Insurance Panel?
We have access to a variety of markets in USA to provide our clients with competitive coverage options and rates. Our agents are experienced in property insurance and understand the coverage provisions of various types of insurance. We can guarantee you comprehensive and affordable insurance coverage. We are also able to provide SBA loan officers with the information and documentation they need to streamline the process.
Frequently Asked Questions
Q: What is hazard insurance?
A: Hazard insurance is a type of insurance required for SBA loans. Hazard insurance protects your business assets from fire, natural disasters, and other covered losses.
Q: Do I need hazard insurance?
A: You are required to purchase hazard insurance when applying for a small business loan.
Q: How do I know if I already have hazard insurance?
A: It should be included in your policy, but it is best to contact your agent to confirm. You can ask about the coverage and make sure it covers everything you need for the loan.
Q: What does hazard insurance cover?
Hazard insurance can cover damage caused by lightning, wind, windstorms, fire, explosions, vandalism, and theft, among other things.
Q: Can you get hazard insurance if you don’t own commercial property and work from home?
A: Yes, hazard insurance covers personal property that can be used as collateral for an SBA loan.
Q: How much hazard insurance do I need?
To calculate the amount of hazard insurance coverage you need, evaluate your assets and financial situation. Our experienced C&S agents can help you determine the value of your assets and recommend coverage. Although the SBA only requires 80% coverage for businesses, we recommend 100% coverage. So if an accident occurs, you will receive the full amount of your loss.