Businesses that own commercial properties in Massachusetts have significant resources invested in their properties. Those investments need protection from potential disasters offered by a Commercial Property policy.
Commercial Property Insurance policies help protect buildings that businesses own more than 5 units, from covered perils. In this way, the policies are like homeowners policies that have been adjusted for the risks and coverage needs of commercial properties.
Commercial property policies normally provide two main coverages; Building and Business Personal Property. A policy may be written for Building coverage only, Business Personal Property coverage only, or written to include both coverage types.
Building coverage, is provided for the policyholders building. This includes the structure, completed additions, permanently installed fixtures, permanently installed equipment and machinery and property used to service the building among other coverage provided.
Business Personal Property coverage, covers other personal property such as furniture, other fixtures, portable machinery, inventory, stock among other property used to business purposes.
Additional coverage may be added to a Commercial Property Policy. These coverage types include Debris Removal, Business interruption and Equipment Breakdown. There are also several endorsements that can be added as well, such as Peak Season coverage to address changing inventory levels, Ordinance and Law, and Spoilage forms. Ask one of our agents about additional coverage and endorsements to further protect your business operations.
Commercial Property policies do not provide liability coverage. Since businesses frequently have specialized liability needs, they are best met through specified liability-only policies. Our Business Lines Professionals can direct you to the most appropriate Liability policy for your Commercial Property policy.
Commercial property policies may be written with different covered causes of loss, called perils. These policies differ in the risks types that they cover. Closed-perils policies cover risks that are listed within the policy’s paperwork, while open-perils policies normally cover any risks that are not specifically excluded within the policy’s paperwork. In most cases, open-perils policies provide more robust coverage than closed-perils ones do.
There are three main types of ‘Cause of Loss’ forms to protect against both open and closed-peril losses:
Basic form, provides limited coverage for a building loss caused by fire, lightning or an explosion. This form also covers sprinkler leakage or a sinkhole collapse. This is known as a closed-peril coverage form as it listed all perils covered.
Broad form, also a closed-peril coverage form, covers all of the perils from the broad form with additional coverage to collapse, falling objects, glass brakeage and snow and sleet among others perils.
Special form, is an open peril policy. This form will cover all perils in the broad form, plus any other cause of loss unless explicitly excluded from the policy
Due to diverse business ventures, there are eleven total Commercial Property Insurance forms that can be purchased to protect items such as buildings and Business Property, Business Income, Extra Expenses, Builders’ Risk, Condominium Associations, Condominium Commercial Unit-owners among other property types available. The most common coverage endorsements purchased are:
All businesses in Massachusetts that own commercial property should have some form of Commercial Property insurance coverage. Few businesses could afford to rebuild their property or replace their contents in it in the event of a disaster.
Some businesses may be required to maintain a certain level of property coverage. Leases and property loans may have stipulations stating that a business must carry coverage at all times. Any businesses with lenders that have such stipulations in their lease or loan can contact one of our experienced agents to secure a policy to meet the lienholders criteria.
Selecting a Commercial Property policy is a major decision. This policy will be protecting a business’ most valuable assets. Moreover, there are many considerations to take into account such as selecting the appropriate coverage type required for your line of business, as well as any lease or loan requirements that may need to be satisfied.
For help reviewing Commercial Property Insurance policies contact one of our agents today. As an independent agency, we can compare policies from our respected carriers to maximize coverage while saving money!