Property insurance is designed to cover property damages due to specific instances that arise, classified as "covered perils." The word peril here refers to what actually caused the loss or damage. The reason it's so important is that although some causes are readily apparent, such as a flood or burglary, others can be harder to determine, like an off premises power failure or technical malfunction.
In addition to various coverages, many insurance carriers require you to purchase specific causes of loss, in order to determine what events are and are not covered by your insurance.
Some of the basic property coverages are:
Covers business-owned buildings against direct physical damage, with values based upon replacement cost or actual cash value.Business Personal Property -
Covers personal property against direct physical damage, with values based upon replacement cost or actual cash value.Loss of Income -
Perhaps the most important feature of any business insurance policy, this coverage will help pay for all lost income, minus the one-time costs of suspending business, provided the physical damage took place on business property (the insured location) and the interruption is from a covered peril.Loss of Income from Dependent Properties -
This coverage protects against loss of income in the event that a business you rely on to sell your products or services must suspend business temporarily. An example would be if you run a gardening supply company, and an accident forces your exclusive supplier of topsoil to shut down for a week.Loss of Rents -
Covers the loss of anticipated income from a rental or leased property due to damage or lessee abandonment.Extended Loss of Income Coverage -
Especially important for restaurants, this coverage pays the difference in income following a loss so that, after a period of having been closed, your gross business income will not be lacking as it takes time for customers to discover you have re-opened.Extra Expense -
Pays for necessary additional expenses to continue business after a covered loss. One example would be renting a temporary facility for your business after a fire.EarthquakeEarthquake Sprinkler Leakage -
This coverage protects against damage caused by a leakage in your building's fire sprinkler system after an earthquake.Flood Fire Legal Liability -
Covers the cost to repair fire damage in a rented or leased building. With this coverage, make sure that the amount you are entitled to is equal to the amount it would take to rebuild the structure in the event of unrepairable damages. Personal Property of Others -
Covers repair or replacement costs for the property of others that is in your care or possession. Businesses such as repair shops and dry cleaners should especially consider this coverage. Building Ordinance -
This coverage pays for the enforcement of any building, zoning or land use law that require demolition or regulate construction, repair, zoning or land use. Coverage is included in the building limit. Increased Cost of ConstructionDemolition -
Covers the cost of demolition of a building or other structure due to enforcement of a building ordinance. Off Premises Power Failure -
Pays for direct and consequential losses to your business in the event of a power failure caused away from the premises. An example would be if a downed power line caused your coffee shop to be shut down during the morning rush.