Why is insurance for commercial and residential properties different?

Insurance for commercial and residential properties differs because the usage and associated risks vary for each. Therefore, it is important to know which insurance is suitable for which type of property.

When insuring a property, it is crucial to understand that insurance for a home differs from insurance for a business premise. This is because the usage of these properties differs, as do the assets contained within them; consequently, insurance policies are selected accordingly.

For residential properties—such as houses, flats, apartments, or other living spaces—home insurance policies (like 'Bharat Griha Raksha') can cover both the building structure and its contents. These policies provide coverage against damage caused by fire, explosions, lightning strikes, earthquakes, floods, storms, and other specified events, subject to the policy terms and conditions.

Such policies can cover standard household items like furniture, electronics, air conditioners, and domestic appliances. However, not every item or type of damage is automatically covered, so it is essential to review the policy terms.

Why is commercial property insurance different?

Commercial properties are used for business purposes—such as shops, offices, warehouses, or other commercial premises. In addition to the building structure, these properties may contain machinery, stock, and other business-related assets. Therefore, specific commercial insurance policies are available to cover these assets.

Some commercial policies may also offer coverage for losses resulting from business closure, known as 'business interruption' cover. However, the availability of this coverage depends on the specific policy and the options selected.

What happens if a business is run from home?

If a home is used for commercial activities rather than solely for residential purposes, a standard home insurance policy may not apply in all situations. For instance, under the 'New India Bharat Griha Raksha' policy, if a business involving the hosting of people is conducted from the home, a separate commercial insurance policy is required. Before purchasing a policy, be sure to check the purpose for which the property is being used, which properties are covered, and the events for which insurance coverage is provided.