Is Liability Coverage Included in Commercial Property Policies?
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.
How Do Closed- and Open-Perils Policies Differ?
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:
- Business Income, provides protection against lost of gross earning by a covered peril
- Extra Expenses, designed to protect interruption to business by covering additional expense to rent another location, machinery or equipment expense to ensure operations do not shut down
- Builders’ Risk, damage to structures while they’re being built
- Condominium Associations, covers the property owned of a condo association
- Condominium Commercial Unit-owners, covers the property owned of a business condo unit owner
What Massachusetts Businesses Should Purchase Business Property Insurance?
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.
How Can Massachusetts Businesses Get Commercial Property Insurance?
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!
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