Property Insurance
Property insurance provides the financial protection against the loss of or damage to the personal property due to theft, fire, weather damage or other perils. The other special forms of property insurance are fire insurance, flood insurance, home insurance, earthquake insurance, boiler insurance. There are two ways to insure the property:
What are the exceptions in property insurance?
Your property insurance will generally not cover flood, earthquakes and terrorism. You may, however, purchase coverage for these events separately.
- Damage caused by flood: Property insurance generally does not cover damage caused by flood. If your business is located in a flood prone zone then you must contact your insurance agent or The National Flood Insurance Program under the Federal Emergency Management Agency.
In some cases, if a building in a flood prone area does not comply with the flood plain building codes and the damage caused is more than half of the market value, then the building will be demolished. "Ordinance or law" coverage may help you bear the extra amount you will have to spend on demolishing and rebuilding the structure. Consider purchasing one if such an incident takes place.
- Damage caused by earthquake: When you get earthquake coverage you would have to pay a percentage of coverage as deductible instead of a flat amount. In the event that your business is shut down due to earthquake, you may put a claim under a business interruption policy, but you need to have earthquake coverage to be able to make that claim.
- Damage caused by terrorism: The Terrorism Risk Act of 2002 mentions that businesses are covered for loss due to terrorism acts only if they have purchased separate terrorism coverage (optional).
Property Insurance as an Important Type in Commercial Insurance
This insurance pays for any loss or damage that may be caused to personal or real property. There are additional insurance that you may purchase in order to protect your business from any kind of peril. They are:
- Boiler and Machinery Insurance - This is also sometimes referred to as "equipment breakdown" or "mechanical breakdown coverage". The accidental breakdown of boilers, equipment and machinery will be covered under this insurance and generally reimburses any loss due to property damage or interruption in business.
- Debris Removal Insurance - Fire, windstorm and flood result in debris and this insurance pays for removal of debris after such an incident. Say, a building catches fire and it consumes the whole building reducing it to only debris. The property insurance will pay for the cost of rebuilding the building but before that it, the debris need to be removed, which is not covered under property insurance. For this, one will need debris removal insurance.
- Builder's Risk Insurance - If you had to reconstruct a building and in the process a windstorm brings down the partially constructed building, a builder's risk insurance provides coverage.
- Glass Insurance - This policy pays for broken store windows and plate glass windows.
- Inland Marine Insurance - Loss or damage of property in transit and property of outsiders in your premises will be covered by Inland Marine Insurance.
- Business Interruption Insurance - As an individual your income may come to a halt because of any damage or loss of property in your business. If an accident causes you to close your business for a definite period of time this insurance will make up for your expenses like rent, taxes, salaries as well as the profit that you would have otherwise earned had you still been in business.
- Ordinance or Law Insurance - In a situation where, your building, which is significantly old, faces damage and the damage occurs to more than 50% of the building, this insurance comes into play. A local ordinance requires that the building should be completely rebuilt after having demolished the entire structure. This is in accordance with the current building codes.
- Tenant's Insurance - This insurance is meant to cover any kind of damage to your building that may be caused due to a negligent employee. Business leases usually require their tenants to carry a certain amount of insurance for such a reason.
- Crime Insurance - Burglary, robbery of money, securities, stocks and employee fixtures or those from outsiders, and theft are covered under crime insurance.
- Fidelity Bonds - If a bonded employee steals business property and money this insurance covers the losses.
|
|
