Commercial Property Insurance

Property Insurance is any type of insurance that indemnifies an insured party who suffers a financial loss because property has been damaged or destroyed.

Property can be classified as:

• Real Property - land and the attachments to the land, such as buildings
• Personal Property - all property that is not real property

Buildings and Business Personal Property

Coverage for the buildings includes the building and structures, completed additions to covered buildings, outdoor fixtures, permanently installed fixtures, machinery and equipment. The building material used to maintain and service the insured's premises is also insured.

Business Personal Property owned by the insured and used in the insured's business is covered for direct loss or damage. The coverage includes furniture and fixtures, stock, and several other similar business property items when not specifically excluded from coverage. The policy is also designed to protect the insured against loss or damage to the personal property of others while in the insured's care, custody or control.


Deductible

The standard deductible is $500. However, other deductible amounts are available and the deductible applies only once per loss.


Replacement Cost and Actual Cash Value

Property can be valued in several different ways. Insurance companies commonly use two approaches to determine value, which also determines how a loss will be paid.  These methods are the replacement cost method and the actual cash value method. Insurers consider replacement cost of a property item to be the cost to replace it with new property of like kind. Actual cash value is replacement cost, minus the accumulated depreciation for age and condition.

Coinsurance

Most building and personal property policies have a coinsurance clause.  This requires the insured to carry insurance equal to at least a specified percentage of the actual cash value of the property.  If a loss occurs, and it is determined that the amount of insurance carried is less than the amount required, a penalty could be placed on the insured.