How much commercial property damage coverage do I need?

There are many types of insurance coverage that a business may need, including property damage coverage.

Understanding what this coverage is and how to gauge the amount of coverage you need will give you the best protection.

What Is Property Damage Coverage?

Insurance coverage for property damage protects business owners from a variety of events that could impact their business. Fires, natural disasters, burglaries, and vandalism are just a few of the issues that could affect a business.

When you have the right policy for property damage in place, damages from these events can be covered.

How Much Commercial Property Damage Coverage Do I Need?

Coverage for property damage will need to cover the following:

• The physical building
• Contents of the building – equipment and furniture
• Contents of the building – supplies and end product or retail items
• Coverage for signage
• Income loss due to business being closed for repairs

To ensure that you have the right amount of coverage for these items, you will need to have an accurate account of the value of all these items in your business.

If you do not have enough coverage on your property and an event occurs that causes damage, you could be facing serious financial hardships while trying to make repairs.

Understanding Property Damage Liability Coverage

There are two things that are crucial to understanding liability coverage for your business.

First, these policies may require additional “riders” or add-on insurance for you to get the most coverage.

Second, there is a difference between replacement value or replacement/repair policies.

Insurance Riders

Some states have the potential for natural disasters because of their locations. Southeastern states like Florida are subject to hurricanes and tropical storms, the southwest is prone to earthquakes, and the north has blizzards. In these states, damages to your business from any natural disasters may not be covered unless you have an additional policy for this type of event attached to your liability policy.

Many states will not include flood protection with any liability policy unless the flood insurance is purchased separately. There are also riders available for losses incurred from digital disasters, such as having your system hacked. Your insurance company can provide you with all of the available riders in your area.

Replacement Value or Replacement or Repair Policies

Insurance companies often try to blend these two types of policies together as one. However, they are not the same. A replacement value policy means that the policy covers the value to replace an item at its current replacement value, even if that is considerably higher than the original cost. A replacement or repair policy means that they will pay to repair or replace a broken item up to the current value of that specific site.

How are these two different? For example, if you have a five-year-old photocopier with a million prints registered on it that shorts out during a lightning storm. A replacement or repair policy would only give you the value of the machine based on its age and use, not the current replacement value. This can make a large difference in getting your business operating again after a disaster.

Commercial Insurance Policies Are Designed To Be Confusing

Insurance policies are designed to be confusing, or at least that is how it seems. To make sure that you have the right coverage for your business, we recommend having an insurance attorney take a look at your policy. They can review the policy and the types of coverage to ensure that you have the proper protection.

If you currently have insurance coverage and need to make a claim, you also would benefit from having an insurance attorney at your side. This is the best way to make sure that you receive all of the benefits of your policy. For a free case consultation with a property damage attorney at Landau Law, contact us today!

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