A Straightforward Guide to Types of Property Insurance Coverage for Businesses
When you have commercial property insurance, your business is protected from a variety of financial losses. Commercial property insurance is a broad category and it includes many different types of coverage.
The type of coverage that you might need will depend on the type of business that you’re in as well as other factors too. Luckily, you can mix and match many different types of coverages to best suit your business needs.
Want to learn more? Continue reading and we’ll walk you through the different types of property insurance coverage.
Direct Damage Property Insurance
When most people hear the words “property insurance”, direct damage coverage is often what they think of. This insurance type covers damage or loss of physical property when it’s from a covered cause of loss.
Natural disasters like hurricanes, tornadoes, and other catastrophic events aren’t necessarily automatically covered. Be sure to check with your provider about what disasters you’re covered for. And even if your insurance does cover rebuilding after a natural disaster, it might not cover debris removal for the property.
Obtaining Direct Damage Coverage
Typically, businesses purchase direct damage coverage by obtaining a commercial property policy. This covers damage or loss of business-owned assets.
These assets often include things like production machinery. They can also be office equipment, buildings, and furniture.
This insurance also covers damage or loss of property owned by a third party that the company uses for its business. For example, a printer that the company rented from an office supply store is usually covered.
Property policies tend to be rather flexible. You can remove, add, and change coverage as needed. You can have commercial property coverage as a separate policy.
But if you want, you can combine it with other coverages under a larger package policy. You can also purchase the coverage under a BOP (business owner’s policy).
Watch out if you operate your business out of your home. If so, you’ll likely have to get a separate commercial policy. Most home insurance policies don’t cover business equipment.
Time Element Coverages
With time element coverages, losses are tied to the amount of time that it takes to repair the damaged property. The losses grow as the necessary time to make repairs increases.
Leasehold interest coverage is a time of time element coverage that covers financial losses. This is typically because of direct physical damage or loss of property at your business location.
Extra expense coverage covers expenses that you receive to reduce or prevent a shutdown of your company. This happens after your property has sustained some sort of physical loss.
Business income coverage is used to cover the income that your company loses when your company must shut down. This is often due to damage to your physical property.
Any of these time element coverage can be added to your commercial property policy.
Inland Marine Insurance
Most of the aforementioned coverages typically just deal with property at one business location. However, many businesses must move equipment between locations or to their customers. The purpose of inland marine insurance is to cover property that your business transports on land.
This is different than ocean marine insurance which covers boats and cargo that travel on bodies of water. One example is accounts receivable coverage, which is used to cover your business against losses. These losses must be because your accounts receivable records were damaged.
Fine arts coverage, on the other hand, covers damage or loss of paintings, statues, or other works of art that are owned by your business.
Inland transit coverage covers damage or loss of items that are transported over land in the United States. These goods are usually transported by train, truck, or both.
Contractors’ equipment coverage has to do with damage or loss of machines and tools. It generally deals with mobile equipment that’s owned by contractors.
An installation floater covers damage to property that you are intending to install at a customer’s premises. Coverage applies while it’s in transit and while it’s waiting to be installed.
An exhibition floater is used to cover damage to property that’s displayed at an exhibition or trade show. It also covers the property while it’s being transported to the site of the exhibition.
Cyber liability insurance covers you against damages that are caused by your own website or electronic data. For example, if your system gets hacked, then you’ll be covered.
Most commercial property policies cover property theft. Unfortunately, those policies typically don’t count thefts that are committed by employees. They also usually exclude damage or loss of securities or money.
To better protect themselves against these other losses, companies can purchase crime insurance. This coverage can be added to a package policy or be written alone.
A company can also purchase employee theft coverage. This specifically protects against employees stealing securities, money, or other property.
Computer fraud coverage is a great way to protect your business from theft by someone who steals by using a computer.
Understanding the Different Types of Property Insurance
It’s important to understand the different types of property insurance for businesses. This way, you can better protect your company and your company’s property. Take a look at your company, your location, and the types of properties you need to protect in order to best determine the right coverage for you.
Interested in getting property insurance for your business? Contact us today for a quote!
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