it’s a good idea to have a basic knowledge of the types of insurance
coverage available. While your business changes and expands you
should have the essential knowledge to purchase insurance coverage
as new exposures arise. The following commercial lines of insurance
cover broad areas of exposure present with most business operations:
Boiler and Machinery
Commercial General Liability
Coverage Sections, Limits of Insurance, and 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 standard coverage sections of commercial property insurance.
Commercial property insurance can be sold separately as
an individual line policy (referred to as a monoline policy), or it
may be sold 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 includes buildings or structures and any completed
additions, that happen to be listed on the declarations page of a
commercial policy. Permanently installed fixtures, machinery, and
equipment are also insured as an element of building coverage. for example fire, explosion, windstorm, vandalism, etc. You are able to
usually request basic specified perils or broad specified perils protection.
Broad specified perils protection increases the list of protected
perils identified within basic specified perils.
Open Perils coverage covers all losses unless they’re specifically
omitted. Earth movement (including earthquake) and flood are
2 common perils that are omitted under open perils coverage.
Because open perils coverage offers more comprehensive protection,
it’s more expensive compared to a specified perils policy.
Improvements and Betterments – Usually applied by a lienholder.
Protects all permanently installed improvements and betterments,
which cannot be removed when a tenant vacates the building.
Glass – Standard specified perils regarding glass coverage include any
resulting damage to other property from broken glass as a result of
vandalism and also vandalism to glass building blocks. Broad
and specific perils covers $ 100 per pane of glass up to $ 500
per occurrence. A glass form must be added for scheduled
glass coverage when there is a significant glass exposure to
insure. A glass form consists of the number of panes, dimensions,
location, lettering, and ornamentation. A different glass
deductible may be scheduled as well.
Peak Season – An endorsement that offers extra limits
on personal property inventory throughout a designated period of
time. This is specifically used to cover fluctuating inventory
values before and during peak shopping seasons.
Inflation Guard – Immediately modifies the limits of insurance
to maintain with inflation. construction cost index in a regional area or a specific percentage
per year. This particular endorsement can be extremely important in assisting to
preserve adequate coverage limits, which can protect against
potential coinsurance penalties in a property loss.
Time Element – Insurance which covers other losses arising
from a direct loss by a covered peril to business property.
Business interruption, extra expense, and loss of rents and rental
value tend to be the most common time element coverages. Business
interruption coverage replaces lost business income after a covered
loss. Certain key employees can be named, allowing the employer
to continue to pay their salaries until the business restarts operations
following a loss. Additional expense coverage mainly applies to service
or product associated businesses where the business has to continue
to ensure the survival of the company. Extra expense can pay
for office space, equipment rental, advertising, or most expenses
deemed reasonable for keeping the company operating after a