What is commercial fire insurance?
Commercial fire insurance protects your business property, equipment, and inventory from fire and smoke damage. It's typically included in a business owners policy (BOP), which combines commercial property coverage with liability, business interruption, and more.
Check out our BOP coverage guide for a full list of what's included, or start a quote or talk to an insurance expert to learn more about your options.
Why small businesses need fire insurance
Small businesses need fire insurance because a fire can damage your building, halt operations, and lead to costly repairs and lost income. Having fire coverage as part of your small business insurance policy allows you to manage these risks and recover faster after a loss.
Who needs commercial fire insurance for their business?
Commercial fire insurance coverage helps protect businesses that own or lease property. It's especially valuable for industries like:
- Restaurants and food trucks
- Manufacturers
- Auto repair shops and garages
- Warehouses and distribution centers
- Retail stores
- Hair salons
What does commercial fire insurance cover?
Commercial fire insurance can pay to repair or replace your business assets if they get damaged or destroyed by a fire. The following coverages are included in a BOP:
- Commercial property: Covers fire and smoke damage to the building. It may also cover damage caused by firefighting efforts.
- Business personal property: Covers the cost to repair or replace items like equipment, furnishings, and product inventory.
- Business interruption: Covers lost income and relocation costs if your business is unable to operate after a fire.
What isn't covered by fire insurance?
Fire insurance typically doesn't cover fires that are intentionally set or caused by negligence or poor maintenance. It may also exclude fire-related damage that results from long-term wear and tear or certain natural disasters unless additional coverage is added. To avoid surprises, review your policy carefully to understand any fire exclusions in commercial insurance.
What if a fire forces me to shut down operations temporarily?
With a Progressive Commercial BOP, you get business interruption insurance. After you file a commercial fire insurance claim, coverage begins following a short waiting period, usually 24 to 72 hours. It can cover lost income, rent, loan payments, employee wages, and temporary relocation expenses until you're back in business.
How much does commercial fire insurance cost?
Commercial fire insurance coverage is included as part of your business owners policy. The national median cost of a BOP with Progressive Commercial is $80 per month, and the average monthly premium is $127. However, your rate may vary based on specific factors, such as:
- Profession
- Building location
- Property value
- Business size
- Coverage needs
- Claims history
Progressive Commercial provides flexible options so you can choose the coverages, deductibles, and limits that work for you. The easiest way to see how much your BOP will cost is to start a quote online.
Why liability matters in commercial fire coverage
If a fire starts in your business and spreads to neighboring properties, you could be held responsible. Fortunately, a BOP includes liability protection, which covers damages you cause to others and helps protect you from lawsuits. If someone sues you because of the fire, liability insurance may also pay for legal expenses.
Preventing commercial fire insurance claims
The U.S. Fire Administration estimates there were 110,000 nonresidential building fires in 2023, with over $3.1 billion in financial losses. Encouragingly, these numbers have trended downward in recent years, due in part to improved fire codes and building design, as well as increased awareness among business owners.
In addition to having adequate fire insurance coverage, there are other ways to reduce the risk of a fire:
- Install fire protection systems: Make sure your business space is equipped with sprinklers, fire extinguishers, and smoke detectors — and test them regularly.
- Inspect electrical equipment: Faulty wires are among the leading causes of fires in commercial buildings. Have your electrical systems checked annually by a licensed professional.
- Handle flammable materials safely: Follow OSHA guidelines for proper storage and disposal of chemicals and other hazardous liquids.
- Institute safety protocols: Conduct drills on fire safety and evacuation procedures with your employees and include a fire response plan.
Frequently asked questions about commercial fire insurance
Is commercial fire insurance required by law?
Not usually. Commercial fire insurance typically isn't mandated by law, but many landlords and lenders request it. Review your lease or loan agreement to confirm your requirements.
Does commercial fire insurance cover smoke damage?
Typically yes. Since smoke damage is the result of a fire, commercial fire insurance usually covers it. Check your Progressive Commercial policy to understand what's included.
Can I get reimbursed for lost income if I have to shut down my business temporarily?
Yes. Your BOP includes business interruption coverage, which can help pay for lost wages, payroll, temporary rentals, and more.
Commercial fire insurance coverage through Progressive Commercial
Commercial fire insurance provides the support your business needs to recover, rebuild, and get back to work after a loss. With the right coverage in place, you can move forward with confidence.
Progressive Commercial offers customized business insurance for companies of every type and size. With over 50 years of experience, our team can help you find solutions tailored to your needs.
Get started with an online quote. It's a fast, easy, and secure way to explore coverage options, check for discounts, and find a policy that fits your business.
