Whether you’re starting a business or thinking about updating your business insurance, you will want to ensure you have the proper coverage in case of an accident or emergency. This article will serve as a general overview and guide, but you should work with your agent to ensure the coverage you purchase meets your specific needs.
What Does Commercial Insurance Cover?
Your Building
Commercial property insurance is designed to cover the physical building where your business operates This insurance will typically cover the actual building and completed additions, indoor and outdoor fixtures, and permanently installed machinery and equipment.
Your Business Personal Property
Business personal property is all the property you own that you use for business purposes. To determine what is usually considered business personal property, think of all the items that would fall out if you turned your business upside down (with no ceiling in the way).
Common examples include:
- Furniture and temporary fixtures
- Temporarily installed machinery and equipment
- Stock
- Upgrades made to a rented space
- Leased personal property which you are contractually obligated to insure
Most business personal property commercial policies will only cover business personal property within 100 feet of the building.
Personal Property of Others
Your policy may also cover the property of others that is in your care, custody, or control. It could be property you are borrowing or your customers’ or employees’ property. It will typically cover property within 100 feet of the building. A covered claim would usually reimburse the owner of the property, not the owner of the business.
What Type of Damage is Covered in a Commercial Property Insurance Policy?
It is difficult to define what type of damage is covered in a commercial property insurance policy because not all policies are created equal. Generally, there are three policy types as follows:
Special Causes of Loss Form
Special causes of loss is the most extensive of the three policies. Also known as an ‘all-risk’ policy, it covers all direct physical damage except for what’s specifically excluded.
Basic Cause of Loss
Special cause of loss is preferred and recommended for most businesses. However, not every business qualifies due to property condition, vacancy, or loss history. These companies may only be eligible for the basic cause of loss form.
This form typically protects against:
- Fire
- Lightning
- Explosion
- Smoke
- Windstorm
- Hail
- Riot
- Civil commotion
- Damage caused by an aircraft or vehicle
- Vehicle damage
- Vandalism
- Sprinkler leakage
- Sinkhole collapse
- Volcanic damage
Broad Cause of Loss Form
A broad cause of loss form covers everything in the basic form as well as these additions:
- Falling objects
- The weight of snow, sleet, or ice
- Water damage from appliances
- Collapse due to specific causes
Some policies do not fall into one of these three categories. However, they are not typically recommended and should only be purchased under the guidance of a reliable insurance expert.
What Damages are Typically Excluded from a Commercial Property Insurance Property?
Commercial property insurance policies typically do not include coverage for:
- Flood
- Earthquake
- Terrorism
- War and military action
- Intentional damage
- Nuclear hazard
- Normal wear and tear
If you are at high risk for flood or earthquake, consider purchasing a separate policy for such exposures.
Other Commercial Policies to Consider
You may also consider investing in these commercial insurance policies:
- Business Income & Extra Expenses: This covers your net income, payroll, and operating expenses when your company is non-operational due to a covered loss.
- Equipment Breakdown: Although commercial insurance may cover equipment, it does not cover breakdowns. This insurance offers reimbursement for some repairs to covered equipment.
- Ordinance and Law: Under a typical commercial property policy, insurance companies will replace damaged buildings, but they aren’t obligated to cover electrical and plumbing and bring it up to code. Ordinance and law insurance is designed to cover these expenses.
Want to learn more about the insurance you need for your commercial property? Contact your agent today. To find an Acadia agent near you, go to https://www.acadiainsurance.com/find-an-agent/.
There for You: Acadia Insurance
At Acadia, we’re all about helping businesses throughout the Northeast thrive. Our mission is to provide superior service and products as close to you as possible, providing you with the coverage you need to proceed with confidence.
We understand what you want most from your insurance is security and peace of mind. That means knowing you are working with an insurance provider who will support you every step of the way to help you protect your business.
With Acadia, not only can you get coverage tailored to your needs, but you will also receive support from dedicated claims professionals to guide you through the claim process in the event of a loss. That way, you know exactly what to expect. Knowing your claims professional by name and a handshake – that’s “Closer Coverage”. Get to know more about how we work and find an agent near you by going to the Find an Agent section on our public website (www.acadiainsurance.com).
Acadia is pleased to share this material for the benefit of its customers. Please note, however, that nothing herein should be construed as either legal advice or the provision of professional consulting services. This material is for informational purposes only, and while reasonable care has been utilized in compiling this information, no warranty or representation is made as to accuracy or completeness. Recipients of this material must utilize their own judgment in implementing sound risk management practices and procedures.
