Commercial Property Insurance Checklist for Bay Area Small Businesses

What does commercial property insurance cover?

Commercial property insurance covers your building (if you own it), business equipment, inventory, and often lost income when a covered loss forces you to close. For most Bay Area small businesses, this coverage lives inside a Business Owner's Policy (BOP), which bundles property and general liability into one package.

I've had this conversation dozens of times with Bay Area business owners: they've been in business for years, they have coverage, and they've genuinely never looked closely at what they actually have. Not because they're irresponsible — because they're busy running a business and their broker set it up once and it just auto-renews.

The problem is that businesses change. Inventory goes up. You add equipment. You move to a new space. You sign a lease with different requirements. And the protection plan quietly stays the same.

This checklist is designed to take you through the key questions in about 20 minutes. The goal isn't a perfect plan — it's making sure you're not sitting on a gap you don't know about.

Step 1: Verify your basic information

Make sure your address, business description, and lease responsibilities are accurate. Errors here can cause claim denials — and they're more common than you'd think.

A few years back, a Bay Area client moved their office across the hall to a bigger suite. Same building, same landlord, same everything — except the suite number on their protection plan was now wrong. They didn't think to mention it. When they had a water loss six months later, the adjuster flagged the address mismatch and it delayed the whole process. Ten seconds of updating could have saved weeks of headache.

The address and suite number match where you actually operate

The business description accurately reflects what you do (this matters for coverage and pricing)

Any subtenants, shared spaces, or off-site storage locations are disclosed

You know what your lease says about who's responsible for improvements, fixtures, and buildout — and your coverage reflects that

How much commercial property coverage do I need?

Your Business Personal Property (BPP) limit should be based on the actual replacement cost of your equipment, inventory at peak season, and all fixtures — not a round number someone picked years ago.

This is where I see the most underinsurance with Bay Area businesses, by a wide margin. Business personal property limits often get set once at inception and never revisited.

Your Business Personal Property (BPP) limit is based on an actual estimate, not a round number someone picked

If you own the building, your building limit is based on rebuild cost — not market value, not what you paid

You know whether your coverage is Replacement Cost or Actual Cash Value (the difference at claim time is significant)

If your plan has a coinsurance requirement, you understand how it works and you're confident you'd meet it

What is replacement cost vs actual cash value?

Replacement Cost pays to replace your damaged property with new items at today's prices. Actual Cash Value deducts depreciation, paying you what your used items were worth. Most Bay Area businesses should have Replacement Cost.

Most commercial property plans default to Actual Cash Value (depreciated) unless you specifically ask for and pay for Replacement Cost. The difference at claim time can be significant.

Replacement Cost means the carrier pays to replace your damaged equipment or inventory with new items at current prices. Actual Cash Value means they deduct depreciation — so if your 5-year-old computer gets damaged, you're getting paid for a 5-year-old computer, not a new one.

What is business income coverage and do I need it?

Business Income coverage pays for your lost revenue and continuing expenses when a covered loss forces you to close temporarily. It's essential for Bay Area businesses that couldn't absorb 60–90 days of lost income.

This is the one that keeps me up at night for commercial clients, honestly.

Business income coverage pays for your lost revenue and continuing expenses when a covered loss forces you to close or reduce operations. Extra expense pays for the additional costs you incur to get back up and running faster — renting temporary space, rush-ordering replacement equipment, etc.

The two questions that matter most:

You have it

The limit and period of restoration actually make sense for how long it would realistically take to get back up and running

You understand what triggers it (it's usually tied to a covered property loss, not every interruption)

What coverages do Bay Area businesses often miss?

Most gaps appear in five areas: Business Income, Equipment Breakdown, Water Damage specifics, Tenant Improvements, and Ordinance or Law coverage.

These are the ones where gaps show up at claim time and cause real pain for Bay Area businesses.

Equipment breakdown

Included if you rely on anything mechanical — compressors, HVAC, refrigeration, specialized machinery, commercial kitchen equipment

Standard property coverage often excludes mechanical breakdown; this fills that gap

Water damage specifics

You know what your plan covers for leaks, backups, and seepage

You know what it excludes (this varies more than people realize)

Tenant improvements and betterments

If you've built out your space and you'd be responsible for rebuilding it, that's covered

The limit is realistic for what a rebuild would actually cost today

Ordinance or law

If a covered loss required you to rebuild to current code, your plan helps with the upgrade costs

Older buildings in the Bay Area especially — this one matters

What doesn't commercial property coverage include in California?

Earthquake and flood are excluded from standard commercial property plans. You need separate coverage for each. Wildfire and smoke protection varies by carrier and location.

These aren't hypotheticals. They come up regularly for Bay Area businesses.

Wildfire and smoke: you know how your plan responds, and whether there are any restrictions on your specific location or occupancy

Earthquake: not included in standard commercial property. Separate coverage required. Have you made a conscious yes or no decision?

Flood: also excluded. Separate coverage if relevant. Conscious decision made?

You're not in a "high hazard" zone without knowing it — worth asking your broker directly

Do I need to document my business property?

Yes. Take photos or video of your space and equipment now. If you have to file a claim later, visual documentation makes the inventory process much easier.

You can find your declarations page in under 60 seconds

You have photos or video of your space and key equipment (inventory this visually, not just on a spreadsheet)

You have a basic inventory list — even rough is better than nothing

Your certificates of insurance (COIs) are accurate and match what your leases or contracts require

🔶 Growing Up Covered insight

A note from Zach

The business income piece is the one that keeps me up at night for my commercial clients. Property damage is painful but it's visible — you can see what broke, you know what to replace. Lost income is different. If a fire shuts your restaurant for four months, or a water leak closes your retail space during the holiday season, the damage is the gap between what you're still paying out and what you're no longer bringing in.

I've seen Bay Area businesses recover from the physical loss and struggle with the income part because the limit wasn't right or the waiting period was too long. Ask your broker specifically: if I had to close for 90 days, what would I actually collect? Make them walk you through it. That conversation is worth more than the checklist.

Read more at GrowingUpCovered.com

Questions to ask your broker

Copy and paste these:

What are the biggest exclusions in my property coverage for my type of business?

Am I Replacement Cost or Actual Cash Value on business personal property?

Do I have coinsurance? If yes, how was my limit calculated and when was it last reviewed?

How does Business Income trigger, and what is my actual limit or time period?

Do I have Equipment Breakdown coverage? If not, do I need it?

What's my exposure on tenant improvements if I had a total loss?

Have I made an intentional decision on earthquake and flood?

What to do next

Send over your dec page and a rough inventory estimate and we'll sanity-check the limits and flag the gaps worth talking about. The goal isn't a perfect plan — it's making sure you know what you have before you need it.

No pressure. Just clarity.

Let's walk through it together — connect with us at nadlerinsurance.com or call us directly.

Nadler Insurance has been protecting Bay Area businesses since 1927. Four generations. | (650) 508-8000 | nadlerinsurance.com

Nadler Insurance, Inc. | CA Department of Insurance License #0582383 | 1560 Laurel Street, Suite 200, San Carlos, CA 94070