Commercial Property Coverage

 Coverage under the commercial property (CP) policy is for property only. A separate policy form provides liability. The CP policy covers buildings, the insured’s personal property, and under certain circumstances, personal property of others. For coverage to apply, there must be a limit shown in the declarations for that type of property.

Insurance contract interpretation relies on meanings disclosed in common usage dictionaries, unless the term is specifically defined in the policy. Building means the building or structure described in the declarations. Further definition is unnecessary since the only question that would arise in the event of a claim is if the building or structure is described in the declarations.

Coverage under building coverage applies to five other classes of property:

1. Completed additions to any building or structure described in the declarations.
2. Fixtures, including outdoor fixtures.
3. Permanently installed machinery or equipment.
4. Personal property used to maintain the building, structures or premises.
5. Additions under construction or alteration and repairs to the building or structure.

While completed additions to an insured building or structure are automatically covered, it is important to pay attention to the coinsurance requirement in the policy. To make sure that you maintain the proper coinsurance amount, it is important for you to contact us immediately when you start construction.

Fixture means something that is fixed or attached as a permanent attachment or as a structural part. An outdoor light attached to the building would be covered as a fixture. Outdoor furniture would not automatically be covered as a fixture.

Many businesses utilize equipment that is installed permanently. That does not mean that it has to become an integral part of the structure, but that it is installed without the ability to simply move it around without a significant effort to uninstall the piece of equipment. Examples would be a printing press or milling machine.

Personal property used to maintain the premises might include mowers and snow blowers, fire extinguishing equipment, floor coverings, or appliances for refrigeration or cooking. Items of personal property for the maintenance of the premises could be considered part of the building, but again, maintaining coinsurance is important.

Additions under construction or alteration and repairs to the building or structure are covered. Materials, equipment, supplies and temporary structures within 100 feet of the described premises would be covered unless there is other insurance applying. For these items to have coverage, the policyholder must have an insurable interest.

There is nothing simple about making these judgments, so it is important that you have someone who has a good understanding of commercial insurance to help guide you through this maze. We stand ready to help you with any of your insurance needs.

Reichley Insurance Agency is committed to excellence. We pride ourselves on offering our clients reliable coverage and great service. As an independent Ohio insurance agency, we can provide you with all types of insurance coverage from the top carriers in the country. Our team of trusted agents will work with you to find a policy that meets your needs – and falls within your budget.

 

Our dedication makes the difference...

   

Toll Free: 87-REICHLEY (877-342-4539)

Email: info@reichleyins.com

The information in this article is meant as a guideline only. There is nothing in this publication that alters the coverage or interpretation of any specific policy. Because some statements are generalizations, and because different companies’ policies contain slight differences, please refer to your specific policy. Call our office before making any judgments or decisions concerning your particular situation and coverage that may or may not apply.