What Is Property Insurance & What Does It Cover?

Just suppose your business property was hit by:

  • Lightning
  • Fire
  • Hurricane
  • A Burglar
  • An Embezzler

What would you do? Hopefully, these things will never happen to your company, but an astute business owner however protects himself/herself and their company from the worst case scenario by:

What is the purpose of property insurance?

The goal of property insurance for the small business owner is to provide critical financial assistance in the event of a loss, so that the company can continue to operate business as usual with as little disruption as possible. We will first discuss what a property insurance policy covers, then we’ll discuss what it doesn’t cover in a following article.

What does a property insurance policy cover?

Since every insurer has their own policies, it is important to check with your agent as to what specifically your business property policy covers. With that said, insurers offer small business owners a huge variety of property insurance policies. There are policies that cover only a single peril, or cause of loss, such as a fire insurance policy, a crime policy or an electronic equipment policy. The particulars of the policies vary from insurer to insurer.

Do you have a BOP?

Business Owners Policy (BOP) pretty much covers any buildings the business owns and much of the property needed to run the business. For example:

  • Structures
  • Permanently installed fixtures
  • Machinery and equipment
  • Outdoor fixtures
  • Items you use to maintain or service the building
  • Any additions under construction.
  • Computers
  • Raw materials or inventory
  • Any property of others that is in your care. For example if you are a TV repair shop fro instance.

Here is a list of covered causes of loss:

  • Fire
  • Lightning
  • Most explosions
  • Windstorm
  • Hail
  • Smoke from accidental fire
  • Aircraft or vehicles (not including those owned or operated by the business itself)
  • Riot or civil commotion
  • Vandalism
  • Automatic sprinkler leakage
  • Sinkhole collapse
  • Building collapse
  • Volcanic action
  • Certain types of water damage
  • Actions of Civil Authorities
  • Bogus Money Orders and Counterfeit Money
  • Contingent Business Interruption
  • Computer Operations Interruption
  • Debris Removal
  • Electronic Data Loss
  • Expense to Preserve the Value of Property
  • Fire Extinguisher Recharge
  • Forgery or Alteration
  • Fungi, Rot and Bacteria
  • Window Glass Breakage Expenses

Additional property insurance coverage you may need

Some types of coverage are important for some customers, but not for others. Here is a list of “optional coverages,” which are extensions and endorsements you can add to your commercial property insurance with the payment of an extra premium:

  • Accounts Receivable
  • Adding Additional Insureds
  • Burglary and Robbery
  • Computer Fraud and Funds Transfer Fraud
  • Earthquake and Volcano Coverage
  • Employee Dishonesty
  • Food Contamination
  • Mechanical Breakdown
  • Money and Securities
  • More Coverage for Valuable Papers, Records and Electronic Media
  • Newly Acquired or Constructed Property
  • Outdoor Property
  • Outdoor Signs
  • Personal Effects
  • Personal Property Off Premises
  • Spoilage Coverage
  • Utility Services—Direct Damage
  • Valuable Papers and Records
  • Water Back-up and Sump Overflow

We hope this helps you! As a reminder, please remember that each policy and insurer is different, so talk to your agent about your specific needs. Are you ready for a property insurance quote from insurancehub.com? Contact our business insurance advisors now.