Commercial Property

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A risk management strategy for your business should include protection of the physical building and contents owned by the business.  This strategy should include safety considerations such as proper construction, sprinkler and alarm systems, computer backup and various other on-site safety strategies that can reduce the incidents of property damage.  The most common and the most economical approach to the protection of commercial property is through an insurance program.

Buildings

Commercial buildings are often one of the single biggest asset that a commercial venture may own and they are at risk of many types of damage from storm related damage, to accidental fires and even vandalism.  There are two approaches to insurance coverage for your building.

Coverage forms for buildings are offered either as a “named peril” form or as an “open peril” form.  In a named peril form the causes of loss are listed in the policy, and in order for a claim to be covered, the damage must have been caused by one of the listed perils.  In an open peril form, the policy simply covers risks of direct physical loss, unless the cause is excluded.  Instead of providing a list of covered perils, this form only provides a list of what it does not cover.  This type of form provides broader protection for your buildings.

Business Personal Property

Office equipment, machinery, your finished goods, and even betterments and improvements that you make to a property that you lease are considered your business personal property.  This is also covered under a commercial property insurance policy.  Most often, this coverage is provided on a named peril basis.

Some items require specific insurance and they are scheduled on a separate endorsement.  Often this will involve a policy known as an Inland Marine coverage form.  In most cases, this coverage will provide a specific limit for that item, and this coverage is often provided on an open peril basis.

An insurance policy can provide coverage on a Replacement Cost basis for an additional charge.  This means that if you building or contents are damaged, the full cost of repair or replacement will be made without any deduction for depreciation.  An Actual Cash Value policy will pay for loss or damage after depreciation is applied.