Types of Commercial property coverages:
Building coverage normally includes machines and equipment that are permanently installed, such as a furnace, a boiler, and air conditioning equipment. Also covered are fixtures, meaning property that is permanently attached to the building, such as a built-in bookcase or cabinet. Floor coverings, appliances, fire extinguishers, and outdoor furniture are also normally considered Building property.
Business Personal Property (BPP) consists of property you own that does not qualify as Building property and that is not otherwise excluded. It includes office furniture, machines and equipment (if not attached to the building), raw materials, goods-in-process, and finished goods. Improvements and betterments you make to a leased building are covered if you paid for them and they cannot be legally removed. Two types of property you don’t own are also covered; The property you lease that you are obligated under a contract to insure and property in your care that is located inside the building (or outside within a specified distance).
Business Interruption coverage is intended to place an insured business in the position it would have attained, had the loss that caused the interruption not occurred. It should provide funds necessary to sustain the insured business while its operations are suspended as a result of damage caused by a covered peril. It typically pays a business’s profit and continuing operating expenses, including payroll, for a specific time period.
Extra Expense (EE), which covers expenses incurred in mitigating the business loss, or increased costs in continuing a business in the wake of a catastrophe. It can reimburse a policyholder for money spent moving a covered business to a different location while the covered property is restored. It is intended to offset expenses associated with returning to normal operations. Equipment breakdown coverage is often available with this coverage and should be purchased if a customer’s business is dependent upon certain equipment.
Loss of Rents pays for lost income when a covered rental property is made uninhabitable by a covered event and renters need not make rental payments. A lease or a rental agreement is helpful in estimating the amount of coverage needed.
Extended Period of Indemnity provides business interruption and extra expense benefits beyond the period of restoration defined in the standard business interruption policy.
Utility Services – Time Element extends business income and extra expense insurance to protect against losses caused by interruption of services from a specified utility that provides a business with water, power, or communications.
Actual Cash Value is the amount of money the insurance company will pay you based on the depreciated value of your property. It’s calculated by subtracting the depreciation of your property from the replacement cost.
Replacement Cost Value means that you will receive the amount of money you need to replace the property that was damaged or stolen. This type of policy will get you more than the actual cash value of the property or assets because you’ll get enough money to replace everything you lost.