Commercial Property Insurance Policy 101

Commercial Property Insurance Policy 101

Commercial Property Insurance Def:

A commercial property insurance policy is for businesses and other organizations that insure against damage to their buildings and contents due to a covered cause of loss, such as a fire, flood, earthquake, tornado & wind. The policy may also cover loss of income or increases in expenses that result from the property damage. Commercial property insurance policies may be written on named peril or all-perils basis.

What’s The Difference Between Named Perils & All Perils Commercial Property Insurance?

Named Perils – is a commercial property insurance term referring to policies that provide coverage only for loss caused by the perils specifically listed as covered.

Vs.

All Perils or All Risk- is a commercial property insurance term referring to coverage arising from any fortuitous cause except those that are specifically excluded.

What’s The Difference Between Property Damage and Business Interruption Coverage In Our Commercial Property Insurance Policy?

Commercial Property Insurance Physical Damage Coverage– This is the portion of your policy that kicks in to cover the building itself, the equipment, inventory, raw materials etc in it. When there is a loss to physical assets caused by a fire, this is what pays for replacement and repair costs.

Commercial Property Insurance Business Interruption or Lost Profits Fire Coverage – In the aftermath of a fire, there may be a time period where you may not be able to conduct business, often due to a damaged workspace. This part of your policy will cover loss of revenue during the recovery period after a fire.

There are many subtle, but important differences between commercial property insurance policies.  It is important for every organization to have a full understanding of how their commercial property insurance policy functions, what’s covered and what’s excluded.

To learn more about your commercial property insurance policy, speak to an ALIGNED Insurance broker or connect with us today.