The Basics, Part 1: Property Insurance

In this series we look at specific insurance policies and concisely explain how they work.

Property Insurance

Who does it protect?

  • There are a number of property policies. In this blog we will be talking about the standard property policy used to insure buildings and/or your businesses personal property. The property policy protects covered property owned by the first named insured (your company). Covered property means the building and/or your business personal property. It can also include computer equipment.

What coverages does it offer?

  • Property policies are written with two forms, the CP 0010 (defines what is covered) and the CP 1030 (defines how it is covered). The CP 1030, known as the “Causes of Loss – Special Form,” gives you coverage for all perils except for what is excluded. Common exclusions are earth movement, nuclear hazard, flood and other types of water damage, pollution, war, wear and tear, etc.

Who could bring a claim?

  • This is a first party coverage, meaning the first named insured (you) could bring a claim. If your “covered property” gets damaged by a “covered cause of loss,” and you would like insurance to cover the loss, a claim should be filed.

Once property is damaged, what should you do and when should you file a claim?

  • It is the insureds duty to take all reasonable steps to protect the covered property from further damage and to keep records of your expenses necessary to protect covered property. If a law is broken, you must notify the policy. If a claim is to be filed, you must give the insurance company prompt notice of the loss or damage.

What are some claims examples?

  • Fire damages covered property, insurance pays to replace damaged property.
  • A vehicle runs into your warehouse and damages the building, insurance pays to replace that part of damaged building.
  • Fire sprinklers pop for unknown reason, insurance pays to replace damaged property as a result of water damage.

Any specifics to be aware of?

  • As mentioned above there are multiple types of property policies. There are the standard policies (as described in this blog), Builders Risks, Installation Floaters, Equipment Floaters, Crime, Fine Arts, etc. When reviewing property policies, it is key to review all exclusions that may preclude coverage from being grated. It is also key to review any and all sub-limits which may reduce the payout of a claim (water damage, landscape, computer equipment, property in transit, etc.).

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