Types Of Property Insurance Coverage for Businesses

Property insurance is vital for business if they want the property of the business covered against damages. 

Property insurance of the commercial variety gives your business protection against any financial losses that is caused due to damage to its physical assets. This is a very broad category and includes things such as direct damage, the element of time, inland marine and also insurance against crimes. 

Direct Damage

Direct damage is the type of coverage that normally comes to mind when an owner of a business thinks about insurance for their property. This type of insurance serves the function of covering the cost of repairing and also of replacing physical property that has been damaged or destroyed. The cause of the damage however has to be covered in order to access the benefits of this type of insurance. Businesses which are small normally obtain this type of coverage when they get a commercial property policy or maybe a business owners policy, BOP in short. Both of these types of insurance provide coverage in the event of damage to a property that is owned by the business such as production machinery, buildings, furniture in the office and stock as well. You’ll also have to take care of pre-loss property planning as well.

Commercial direct damage insurance is mostly given out on all-risk policies. It is important to note that while it does not cover absolutely every type of risk imaginable, all-risk policies however are comparatively much broader as they happen to cover loss or damage by any potential accidental cause unless they happen to be specifically excluded in the policy. 

The normal policies of this variety do not usually cover losses incurred by natural disasters such as floods and earthquakes. Owners of businesses can cover their business against natural disasters such as the ones mentioned above by adding an endorsement to their property policy or they can simply buy seperate flood or earthquake policies. The last possible option is to purchase a policy that is difference-in-conditions. 

Time Element Coverage

Another very common type of commercial property insurance is the time element insurance. The name, “time element”, is derived from the very obvious fact that any losses incurred are generally tied to the time it will take to repair or replace the property that has been damaged. When we talk about losses, it normally occurs when a particular property cannot be utilized properly because it has been destroyed or damaged. 

Within this type of time element insurance, the most common ones are business income and extra expenses coverages. These can normally be bought individually under forms which are separate or they can also be bought in combination under a single form. The first of this type of property insurance, business income insurance, does the function of covering income your company may potentially lose when a premises of the business has been damaged by a cause that is not excluded in the terms of the policy. The extra expense insurance, on the other hand, does the function of covering your business for any extra costs which your business incurs in continuing to operate while the property which has been damaged gets replaced or repaired. So it is essentially the cost of operating a business with a property which has been damaged by a cause which is included in the terms of the property insurance policy. 

One other type of time element insurance is what is known as leasehold interest coverage. This is a type of insurance which covers any financial loss you suffer by being a tenant when your lease happens to get cancelled because of direct damage to the premises which were leased and it was due to a peril which is covered within the terms of the insurance. This type of insurance can also afford valuable protection in the scenario that the rent you are paying under the terms of the lease is much lower than the rate in the market. 

Crime Insurance

Property insurance of the commercial variety also does include coverage against crimes. It is important to note that while a majority of these policies cover losses that are caused by theft, they do not cover the business if the theft happens to be committed by an employee of the business. Furthermore, a lot of the policies, in fact most of them, exclude money and securities under the term of “covered property.” The way businesses can protect themselves against these kinds of thefts by employees and other financial crimes is by purchasing crime insurance. The following are some examples:

*Employee Theft Coverage: This type of crime insurance protects the business in the event of theft of money, securities or other property by an employee of the business. 

*Money Orders and Counterfeit Paper Currency: This type of crime insurance covers losses that occur when a business accepts a money order which has been issued by a post office or maybe an express company. It also covers the loss a business incurs when it accidentally or mistakenly accepts paper currency which is counterfeit. 

*Computer Fraud Coverage: This type of crime insurance does the function of protecting the business against any theft of property which includes both money and securities as well. In this case, it is covered when the thief uses a computer to move covered property to another person or place. 

Inland Marine Insurance

Most commercial property policies and BOP policies are normally designed to cover property that is situated at the premises of the business. Therefore, most of this type of insurance offers very little coverage for any property that is located off-site. There happen to be a lot of businesses who own property which they make use of and are away from the premises of the business. In order to protect their off-shore properties business will normally purchase a type of insurance that is known as inland marine insurance. 

This type of insurance provides coverage for equipment, machinery or any other property that is transported via land. It varies quite a lot from ocean marine insurance. Ocean marine insurance covers cargo and ships which are travelling on sea. Inland marine insurance is very often called floaters due to the fact that they happen to cover property which is movable.