Commercial Building Insurance Explained
Commercial building insurance is insurance that is designed for a business. That means, it is insurance that makes sure there is coverage for commercial buildings, in case of a loss. This loss might result from things like vandalism, fire and natural disasters. When setting up your commercial building insurance, it is important to know exactly what you are getting. Some plans cover only property structure. Others include coverage for furnishings and equipment. Some even cover personal injury or death that occurs on the premises of your business.
Commercial building insurance is divided into two basic types of insurance. These are named-peril policies, and all-risk policies. Each is exactly what the name implies.
Named-peril policy coverage protects the business in case there are unforeseen calamities. These instances will be specifically named in the policy document. A named-peril policy could be set up to cover damage that results from fire and explosions. On the other hand, it might focus on floods and earthquakes. Therefore, this type of policy covers only clearly listed threats, and because of that, you want to be sure to include the exact kinds of risks you need covered.
In writing a named-peril policy, the insurance company brainstorms a list of likely unforeseen events that would cause damage. These specific perils are clearly listed in your policy. In fact, there will be a clause that states any event, not specifically listed, is not covered under this policy.
A named-peril plan is the exact opposite of an all-risks plan. All-risk coverage plans protect against all probable sources of damage, except those designated in the policy as a specific exclusion. Floods and earthquakes are generally two such events that might be excluded. However, coverage for these natural disasters can be added into the policy if you wish. An all-risk coverage policy protects business property in the event of an unexpected or unplanned for disaster.
It covers much more, so an all-risk coverage plan tends to be more expensive. However, for most businesses, a named-peril plan is sufficient. Business owners simply add riders to cover the extras, if they so desire. Only the business owner knows his or her insurance needs. They depend on the location of the business, and the property and equipment you need protected.
Because there are a variety of companies and packages, most business owners can make a satisfactory purchase on a small business package that meets their individual needs. It is important to determine exactly what you want to insure, and for how much. Take stock of your business property, figure out the value involved, and then make a decision on what is worth the cost of insuring. Do not forget to factor in the buildings involved, equipment and machinery, inventory you may have on hand, documents and business records, and this includes all the databases and vehicles used in the business.
Susan Reynolds is the webmaster for a leading South African Insurance Provider who specialises in Commercial Insurance Policies.
