Buildings you own or lease as a part of your business, your business personal property, as well as the personal property of others make up the basic coverage sections of commercial property insurance. Commercial property insurance can be offered separately as an individual line policy (known as a monoline policy), or it could be offered as part of a Commercial Package Policy (CPP), which will includes two or more commercial coverage parts such as commercial property, general liability, and commercial auto. Building coverage consists of buildings or structures and any completed additions, which are outlined on the declarations page of the commercial policy. Permanently installed fixtures, machinery, and equipment will also be insured as a part of building coverage. The limit of insurance coverage is the estimated sum needed to rebuild your building as well as replace permanently installed fixtures, machinery, and equipment in the case of a total loss. You are required under the insurance policy to fully insure the value of your respective structures. If a building is not insured to value, you could be subject to a monetary penalty at the time of a loss. This penalty is commonly referred to as "coinsurance." It is very important to read and understand the coinsurance clause of your commercial property policy and to go over any concerns with your broker-agent.
Business Personal Property consists of furniture; fixtures, machinery, and equipment not permanently installed; inventory; or any other personal property owned by and utilized in your business.
Personal Property of Others describes property that's in your business's care, custody and control. The sort of business you run will determine if you need to safeguard the personal property of others.
Covered Causes of Loss Whether or not a property loss is covered depends upon the policy language, exclusions, and endorsements. Causes of loss will be divided into two primary categories: specified perils and open perils.
Specified Perils consist of a list of each peril to be covered against, such as fire, explosion, windstorm, vandalism, etc. You can usually request basic specified perils or broad specified perils coverage. Broad specified perils protection adds to the list of covered perils found under basic specified perils.
Open Perils protection includes all losses unless they're specifically omitted. Earth movement (including earthquake) and flood are two common perils which are omitted under open perils coverage. Because open perils coverage provides more comprehensive protection, it's more expensive compared to a specified perils policy.
Valuation Types Commercial property coverage will incorporate a provision to determine exactly what valuation method is to be used to pay the loss. The most common policy valuation technique is Actual Cash Value (ACV). Unless otherwise described in the policy, ACV is considered to be Fair Market Value. There are 2 additional methods of property valuation: agreed value and replacement cost. Agreed value waives any coinsurance penalty and pays 100% in the stated amount (agreed upon amount) for any protected loss. Replacement cost covers the amount it takes to replace your property with new property of like kind and quality up to the limits of insurance. Like ACV, replacement cost is subject to coinsurance.
Buildings you own or lease as a part of your business, your business
personal property, as well as the personal property of others make
up the basic coverage sections of commercial property insurance.
Commercial property insurance can be offered separately as
an individual line policy (known as a monoline policy), or it
could be offered as part of a Commercial Package Policy (CPP), which will
includes two or more commercial coverage parts such as commercial
property, general liability, and commercial auto.
Building coverage consists of buildings or structures and any completed
additions, which are outlined on the declarations page of the
commercial policy. Permanently installed fixtures, machinery, and
equipment will also be insured as a part of building coverage. The
limit of insurance coverage is the estimated sum needed to rebuild your
building as well as replace permanently installed fixtures, machinery,
and equipment in the case of a total loss. You are required under
the insurance policy to fully insure the value of your respective structures.
If a building is not insured to value, you could be subject to a monetary
penalty at the time of a loss. This penalty is commonly referred
to as "coinsurance." It is very important to read and understand the
coinsurance clause of your commercial property policy and to
go over any concerns with your broker-agent.
Business Personal Property consists of furniture; fixtures, machinery,
and equipment not permanently installed; inventory; or any other
personal property owned by and utilized in your business.
Personal Property of Others describes property that's in your
business's care, custody and control. The sort of business you
run will determine if you need to safeguard the personal property
of others.
Covered Causes of Loss
Whether or not a property loss is covered depends upon the policy
language, exclusions, and endorsements. Causes of loss will be divided
into two primary categories: specified perils and open perils.
Specified Perils consist of a list of each peril to be covered against,
such as fire, explosion, windstorm, vandalism, etc. You can
usually request basic specified perils or broad specified perils coverage.
Broad specified perils protection adds to the list of covered
perils found under basic specified perils.
Open Perils protection includes all losses unless they're specifically
omitted. Earth movement (including earthquake) and flood are
two common perils which are omitted under open perils coverage.
Because open perils coverage provides more comprehensive protection,
it's more expensive compared to a specified perils policy.
Valuation Types
Commercial property coverage will incorporate a provision to determine
exactly what valuation method is to be used to pay the loss. The most
common policy valuation technique is Actual Cash Value (ACV).
Unless otherwise described in the policy, ACV is considered to be
Fair Market Value. There are 2 additional methods
of property valuation: agreed value and replacement cost. Agreed
value waives any coinsurance penalty and pays 100% in the stated
amount (agreed upon amount) for any protected loss. Replacement
cost covers the amount it takes to replace your property with new
property of like kind and quality up to the limits of insurance.
Like ACV, replacement cost is subject to coinsurance.
Coverage Forms and Endorsements