Facts about Building & Other Property Insurance
- If you own, lease, or are legally responsible to provide coverage for business property, you need Business Property Insurance.
- If you have a peak season (like a greenhouse in spring or a toy store in December), you may need to increase your property coverage to account for the increased inventory at these times.
- If Business Personal Property is insured on Actual Cash Value basis, you may only receive a fraction of what it will take to replace them for items that quickly become obsolete such as computers.
- Many property policies include a co-insurance clause, which acts as a penalty for underinsurance and could greatly reduce your payment for a full or partial loss.
- All property insurance policies contain a Vacancy Condition that defines what is considered a vacant building and what reduction of coverage will apply.
- Loss caused by the backup of sewers and drains is usually not covered unless added by special endorsement.
This coverage is particularly important if you have property stored at or below ground level.
- Often community zoning laws will not allow a structure damaged by fire to be repaired or rebuilt unless it meets current building codes, which may include requirements for sprinklers, elevators, additional stairways, fire resistive materials, and handicapped access.
Building codes also frequently require the demolition of a structure that is more than 50% destroyed
even if it would be more cost effective to repair it.
- Property that belongs to others or is on a short term lease requires special insurance treatment.
- Exclusions can vary depending on geographic location.
For example, businesses along the Florida coast may have exclusions for windstorm and businesses in California may have earthquake exclusions.
- If you are dependent on an adjacent property or nearby store or mall for business, or if you have a major client or large supplier whose interruption of business would have a negative impact on you, you need coverage for loss of income from dependent properties.
