Business Property Insurance

Business Property Insurance

Property/Casualty Coverage

Most property insurance is written on an all-risks basis, as opposed to a named-peril basis. The latter offers coverage for specific perils spelled out in the policy. If your loss comes from a peril not named, then it isn’t covered.

Make sure you get all-risks coverage. Then go the extra step and carefully review the policy’s exclusions. All policies cover loss by fire, but what about such crises as hailstorms and explosions? Depending on your geographic location and the nature of your business, you may want to buy coverage for all these risks.

Whenever possible, you should buy replacement cost insurance, which will pay you enough to replace your property at today’s prices, regardless of the cost when you bought the items. It’s protection from inflation. (Be sure your total replacements do not exceed the policy cap.)

For example, if you have a 30,000-square-foot building that costs $50 per square foot to replace, the total tab will be $1.5 million.

But if your policy has a maximum replacement of $1 million, you’re going to come up short. To protect yourself, experts recommend buying replacement insurance with inflation guard. This adjusts the cap on the policy to allow for inflation. If that’s not possible, then be sure to review the limits of your policy from time to time to ensure you’re still adequately covered.