Small and mid-sized businesses need protection. Commercial insurance is the best form of protection for those businesses, especially if they're just establishing themselves within their industry. Commercial insurance encompasses all types of insurance that businesses purchase to protect all aspects of their business.
Naturally, various types of commercial insurance exist for businesses. The most common forms of commercial insurance are property insurance and liability insurance.
In this short article, we're going to take a detailed look at the forms of property insurance.
Property insurance
Property insurance, as implied, pays for any damages and/or losses to a business property. Property insurance also provides coverage for any contents belonging to a business. It also covers rented properties, since business owners who rent properties are typically required to carry some form of property insurance, in accordance with the terms of their contract.
This form of insurance typically comes in two forms:
Broad form property insurance. This form of property insurance recognizes different types of disasters, and provides coverage against losses for all possible disasters identified by the policy.
Specific peril or single property insurance. This form of property insurance provides coverage for losses caused by a single peril. Fire insurance is a common form of this policy.
Property insurance is also valuated in two distinct ways:
Actual cash value. This valuates losses or damages at the value of a business' property. This type of policy is best for properties that don't have a depreciating value, since it often doesn't provide much in the way of coverage for properties with fluctuating values.
Replacement value. This provides coverage in the form of the actual amount needed to replace lost equipment or, in some cases, the entire property. This policy, however, does have a higher premium.
The aforementioned 'elements' play a large role in finding a suitable property insurance policy for businesses. That's why it's important for business owners to review those particular elements before signing on any particular insurance policy.
Other forms of property insurance include:
Equipment breakdown
This provides coverage for the incidental and accidental breakdown of machinery and other types of equipment. This coverage generally reimburses businesses for property damage and any other business interruption losses.
Debris removal
This provides coverage for debris removal, which typically occurs after a disaster like a fire or flood. Since the old remains need to be removed before the reconstruction of a building starts, this form of insurance will cover the costs of getting the debris removed.
Builder's risk
This covers buildings during the construction process. For example, this insurance provides coverage in cases where a natural disaster may damage or destroy a partially completed building.
Glass and crime
Glass insurance provides coverage for broken windows and other types of glass windows. Crime insurance, on the other hand, covers theft, robbery and burglary of money, stock, securities and other components around the business and from employees or outsiders.
Business interruption
This commercial insurance covers any lost income and expenses that may result from any type of property damage or loss. If a business had to close down for a few months, this type of insurance would provide coverage for rents, net profits, salaries and taxes incurred during that particular period.
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