Commercial Property Insurance

Commercial property insurance is one of the most important types of insurance that you can buy to protect the property, the inventory, and equipment used in running your business.  There are general three types of commercial property insurance coverage forms.

  1. Basic Form – covers specifically listed perils, such as fire, hail, vandalism, wind-storm, building collapse, or sprinkler damage.
  2. Broad Form – covers the perils contained in the basic form plus additional perils, such as damage caused by collapse of roof due to weight of ice or snow or damage caused by accidental discharge of water or steam.
  3. Special Form – covers losses not specifically excluded or limited in the policy.  You should read your policy carefully and review it with your agent or insurer representative to understand what the policy covers.

You can buy commercial property insurance on either a replacement cost value or an actual cash value basis.

  1. Replacement Cost Value generally means that, subject to the policy conditions, the insurer will pay  the cost needed to replace, rebuild or repair the damaged items with materials of similar kind and quality without deduction for depreciation.  The insurer will usually pay the items’ actual cash value first and, when you have replaced or repaired them, the difference between the actual cash value and replacement cost.
  2. Actual Cash Value means the replacement cost of an insured item of property at the time of loss, less the value of physical depreciation as to the item damaged.

Other Kinds of Business Property Coverage That You May Add to a Commercial Policy

This is a short list of other coverages you may wish to review with your agent when discussing your insurance needs:

  • Business Interruption
  • Boiler and Machinery
  • Ordinance or Law, and
  • Inland Marine (i.e. Builder’s Risk, Contractor Tools, Portable Electronic Devices, Salesman Samples, Fine Arts, etc.)