Commercial Property Insurance

It is very important for businesses owners to protect the structure and surroundings of their place of business. Property Insurance is any type of insurance that indemnifies (or makes whole) a business who suffers a financial loss because property has been damaged or destroyed. Property is considered to be any item that has a value.  Property can be classified as real property or personal property. Real property is land and the attachments to the land, such as buildings. Personal Property is all property that is not real property.

Following are different types of property coverages:

• Buildings and Business Personal Property
  Coverage for the building includes the building and structures, completed additions to covered buildings, outdoor fixtures, permanently installed fixtures, machinery and equipment. Business Personal Property owned by the insured and used in the insured's business is covered for direct loss or damage.          
• Coverage Extensions and Additional Coverages
  The coverage extensions section provides limited coverage for newly acquired or constructed property, property of others, certain outdoor property, and the cost to research and reconstruct information on destroyed records. The coverage applies to removal of debris, preservation of property, fire department service charges and pollutant cleanup and removal.
• Replacement Cost and Actual Cash Value
  Insurance companies commonly use these two approaches to determine value, which also determines how a loss will be paid. Insurance companies consider replacement cost of a property item to be the cost to replace it with new property of like kind. Actual cash value is replacement cost, minus the accumulated depreciation for age and condition.
• Coinsurance
  Most building and business personal property polices have a coinsurance clause which requires the business to carry insurance equal to at least a specified percentage of the actual cash value of the property. If a loss occurs, and it is determined that the amount of insurance carried is less than the amount required, a penalty could be placed on the insured.

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