For many businesses, the physical space they operate from—and everything inside it—is central to daily operations. Yet commercial property insurance is often one of the least understood parts of a business insurance program. Policies are sometimes purchased when a lease is signed or a building is bought, then rarely revisited as the business grows.
For business owners in Colorado Springs, understanding what commercial property insurance covers—and where gaps can exist—is an important step in protecting the assets that keep the business running.
What Is Commercial Property Insurance?
Commercial property insurance helps protect a business’s physical assets if they’re damaged by a covered event. This typically includes the building itself (if owned) as well as the contents inside.
Coverage applies whether you own your building, lease space, or operate out of a shared location, though the details can vary depending on how the policy is written.
What Commercial Property Insurance Typically Covers
While policies differ, most commercial property insurance includes protection for several core areas.
Buildings and structures
If your business owns its building, commercial property insurance may help pay to repair or rebuild it after damage caused by covered events such as:
- Fire or smoke
- Wind or hail
- Certain types of water damage
- Vandalism
In Colorado Springs, hail and wind are especially relevant considerations, making it important that building limits reflect current reconstruction costs rather than outdated estimates.
Business personal property
This includes the items your business uses every day, such as:
- Furniture and fixtures
- Equipment and tools
- Computers and electronics
- Inventory and supplies
Coverage should reflect the actual value of these items, especially if your business has invested in specialized or high-cost equipment.
Covered Events vs. Exclusions
Understanding what triggers coverage—and what doesn’t—is key to avoiding surprises.
Common covered causes of loss
Commercial property insurance often covers damage from:
- Fire and smoke
- Wind and hail
- Theft or vandalism
- Certain plumbing-related water damage
Common exclusions to be aware of
Many policies exclude or limit coverage for:
- Flood damage
- Earthquakes
- Wear and tear or poor maintenance
- Sewer backups (unless endorsed)
For some Colorado Springs businesses, flood-related exclusions or water concerns may be worth reviewing more closely, particularly in areas affected by heavy rain or snowmelt.
Replacement Cost vs. Actual Cash Value
One of the most important details in a commercial property policy is how claims are paid.
Why valuation matters
Replacement cost coverage helps pay what it would cost to repair or replace property with new materials, without subtracting depreciation.
Actual cash value coverage factors in age and wear, which can significantly reduce claim payouts.
Business owners often discover this distinction only after a loss, when replacement costs exceed the insurance payment.
Business Interruption and Extra Expense Coverage
Property damage doesn’t just affect buildings—it can disrupt income.
How business interruption coverage helps
Business interruption coverage can help replace lost income if operations are temporarily shut down due to a covered property loss. It may also help with ongoing expenses such as rent, payroll, or utilities.
Extra expense coverage can help pay for temporary solutions—like relocating operations or expediting repairs—so the business can resume more quickly.
Why Regular Reviews Matter for Colorado Springs Businesses
Businesses change over time, and insurance should keep pace.
A review is especially helpful if you’ve:
- Expanded or remodeled your space
- Purchased new equipment or inventory
- Experienced rising construction or replacement costs
- Changed how the space is used
- Not reviewed coverage in several years
Local construction costs, weather patterns, and market conditions can all influence whether current limits are still appropriate.
Bringing It All Together
Commercial property insurance plays a critical role in protecting the physical foundation of a business. Knowing what’s covered, how claims are paid, and where exclusions apply can help business owners make more informed decisions—and avoid costly gaps.
If you’re a Colorado Springs business owner and want a clearer understanding of how your commercial property insurance works, Warrior Insurance can help review your current coverage and discuss options that better align with your space, assets, and operations. A quick call or message through our website is an easy way to take the next step.