Introduction to Commercial Property Policy

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In addition to some of the most common insurance policies which you may need in your life such as homeowners insurance or auto insurance, there are also various policies which you may require for business or commercial needs. One such policy is a commercial property policy.

A commercial package policy, also known as CPP, generally combines insurance protection for major property and, sometimes, liability risks in one insurance policy package.

This type of policy generally provides for basic coverage for larger businesses who are involved in a large or major property dealings. If you are a small business or work with smaller properties, a business owners policy may be more suitable for you.

In general terms, a commercial property policy must contain at least two of the following commercial coverages which can be selected by the business owner and are typically dependent on the field or area your business is in:

  1. Commercial property;
  2. Commercial general liability;
  3. Commercial crime;
  4. Commercial auto;
  5. Commercial and land Marine;
  6. Boiler and machinery; and/or
  7. Farm property and liability

You, as the business owner, should review your commercial package policy to make sure that it contains the appropriate commercial coverages for your needs. You should also review the policy to see whether coverage is being provided on an actual cash value basis or whether replacement cost coverage has been added as an endorsement.

In reviewing your commercial property policy, it is important to determine whether your commercial package policy is the basic form, broad form, or special cause of loss form.

In summary, the basic form generally includes coverage for claims arising out of fire, lightning, windstorm, hail, explosion, vandalism, smoke, sprinkler, leakage, riot or civil commotion, sinkhole collapse, and volcano. The broad form includes perils found under the basic form plus a coverage for damage that results from falling objects causing exterior damage which results in interior damage. This also includes the weight of ice and snow, sleet and snow, and accidental discharge of water or steam under certain circumstances. The special cause of loss form includes all direct accidental losses except those that may be specifically excluded such as flood, war, and wear-and-tear in earth movement.

You, as a business owner, need to be mindful that with a commercial package policy there are certain obligations upon you to read the commercial policy. If you have not read or reviewed your commercial policy, please consider this a reminder to do so in order to familiarize yourself with its contents and to make sure you have adequate coverage.

If you are a business and suffer damages that should be covered by your insurance and are having difficulty with your insurance company, please consult with an attorney who is familiar and experienced with commercial insurance policies and claims to advise you on your legal rights and offer you alternatives to protect those rights.

DISCLAIMER: This and other segments posted on this website are offered for informational and discussion purposes only and is not offered as legal advice. This office only represents homeowners and property owners. We do not represent insurance companies. The information contained in this segment should not be considered to be legal advice.