Nowadays, insurance companies offer a comprehensive range of insurance policies that allow you to effectively manage business risk and anticipate business uncertainty. Typically, property insurance policies are written on an all-risk basis that can cover your business for almost any peril, allowing you to capitalize on specialized policies and pay a lower insurance premium. In doing so, you can have more policies included in a comprehensive property damage coverage.
Types of Property Insurance
Typically, property insurance comes with single-peril insurance policies that provide you with coverage for specific types of property damage and cover your business site and its contents against specific perils, including flood, fire and theft. Such perils may cause unforeseen damages to your business’ inventory, supplies, equipment, machinery, vehicles, securities and trademarks.
In addition, property insurance may also come with multiple-peril insurance policies that provide comprehensive property damage coverage. Typically, multiple-peril insurance policies include popular property damage coverage as the risk the insurer undertakes is significantly higher. Multiple peril insurance provides coverage against losses from volcanic eruption, falling trees, falling aircrafts, riots, strikes, civil commotions, glass and mirror breakage, moving, restoring and reallocation expenses, workplace accidents, third party liability for falling objects, malicious damages and many others.
How to Select Property Insurance
Selecting property insurance requires you to consider several factors that determine the appropriate coverage to fit your needs. For instance, unusual weather conditions may severely damage your property. Therefore, you need to have an insurance coverage that can cover the expenses of living away of your property for a particular period of time until your damaged property is repaired.
The two main factors to consider when selecting property insurance are location and business owners policy.
a) Location
The location that your business is established plays a critical role in regards to the type of property insurance you will purchase for your business. For instance, if your business is established in Boston you are more likely to purchase insurance coverage for snow or ice damage, whereas if your business is established in Los Angeles you are more likely to purchase an earthquake insurance policy.
b) Business Owners Policy (BOP)
Often, property insurance is purchased through a Business Owners Policy (BOP). BOPs do not include popular property damage coverage, but rather optional coverage such as business-interruption and extra-expense insurance.
Business-interruption and extra-expense insurance can help your business recover from a serious financial setback due to interruption of business. By providing coverage for taxes, wages, salaries, debt payments and loss of profit, business-interruption and extra-expense insurance is an effective way to plan ahead and to protect your business from a financial disaster. Also, extra-expense insurance can apply for covering your relocation costs to move from and to a temporary location, rent equipment and pay additional labor costs if your business sustains an unforeseen damage.
Overall, selecting property insurance requires thorough consideration so that you purchase the property insurance that really fits your needs. When you assess the kind of property insurance you should purchase for your business, make sure to evaluate the cost/benefit relationship between the premium paid and the coverage offered.
Sources:
http://businessinsure.about.com/od/propertyinsurance/a/propins.htm
http://niagroup.com/-fyi/articles/business/business-interruption.htm