Commercial Property Insurance tends to be more complicated than other types of insurance, but also essential to protecting the assets and liability of a business owner. Our agents are happy to discuss your business operations and to help determine the potential of loss specific to your industry and the needs of your business. Here are a few things to keep in mind:
What is Covered?
Buildings that you own or lease as a part of your business, your business personal property, and the personal property of others. This includes buildings or structures and any completed additions that are included on the declarations page of a commercial policy. Also covered are permanently installed fixtures, machinery, and equipment.
How much coverage do I need?
This will be estimated by considering the amount needed to rebuild your building and to replace permanently installed fixtures, machinery, and equipment in the event of a total loss.
What causes of loss will be covered?
Causes of Loss will be covered in two different categories: Specified perils or Open perils.
In the case of specified perils, only the perils (or causes of the loss) named in the policy will be covered. Open perils coverage will cover any loss unless specifically excluded in the policy. (Earthquake and Flood are common exclusions in Open Peril Coverage)
How will the property be valued?
The Commercial Property policy will use one of three methods to determine value of the covered property. The most common is the ACV (Actual Cash Value) and is considered to be Fair Market Value in California. The other two methods that may be used are Agreed Value and Replacement Cost. Agreed Value pays 100% of what is specified in the policy while Replacement Cost covers the cost to replace lost property with new (equivalent) property within the limitations of the policy.
Information gathered from http://www.insurance.ca.gov/01-consumers/105-type/95-guides/09-comm/commercialguide.cfm#whatshouldi