Commercial Commercial Property Property InsuranceInsurance

Under the rules of the Insurance Services Office, each commercial package policy contains:

- a common declarations page- a common policy conditions page- two or more coverage parts.

Coverage Parts: 1. Commercial property coverage form(s)2. Commercial general liability coverage form3. Commercial crime form4. Equipment breakdown coverage form(s) 5. Inland marine coverage form(s) 6. Auto coverage form 7. Farm coverage form(s)

The building and personal property coverage form is used to insure commercial property.

Covered property includes:

(1) the building, (2) business personal property of the insured, (3) personal property of others in the care, custody, and control of the insured.

In addition, the insurance can be extended to cover:

-newly acquired or constructed property, -personal effects and property of others,-valuable papers and records, property temporarily off the premises, -and certain outdoor property.

A deductible applies to each covered loss.

A coinsurance percentage must be met to avoid a coinsurance penalty.

There are four causes-of-loss forms:

(1)causes-of-loss basic form, (2)causes-of-loss broad form, (3)causes-of-loss special form, (4)causes-of-loss earthquake form.

Causes-of-Loss- Basic Form (Certain perils or causes of loss are covered.)

Causes-of-Loss- Broad Form

This form includes all causes of loss covered by the basic form plus falling objects; weight

of snow, ice, or sleet; and water damage.

Collapse is also covered under certain conditions.

Causes-of-Loss- Special Form

This form insures against "risks of direct physical loss."

This means that all direct physical damage losses are covered unless specifically

excluded.

Burden of proof falls on the insurer to show that a loss is not covered because of an

exclusion or limitation.

Causes-of-Loss Earthquake Form

All earthquake shocks in a 168-hour period are considered to be a single event.

A deductible is stated in the declaration.

The business income and extra expense coverage form covers the loss of business income due to the suspension of operations during the period of restoration.

The amount paid for a covered loss is the net profit or loss that would have been earned if the loss did not occur plus normal operating expenses that continue during the period of suspension.

Several additional coverages are also provided.

Extra expenses incurred as a result of a loss are covered:

-loss of business income and extra expenses caused by action of a civil authority are covered up to three weeks;

-the loss of business income because of a direct physical loss to new buildings, or because of alterations or additions to existing buildings, is also covered;

-and the loss of business income continues to be covered up to 30 days after repairs are completed and operations are restored.

The ISO equipment breakdown coverage form can be used to provide the following coverages, depending on the needs of the insured:

a. property damageb. expediting expensesc. business income and extra expense—

extra expense only

d. spoilage damagee. utility interruptionf. newly acquired premisesg. ordinance or law coverageh. errors and omissionsi. brands and labelsj. contingent business income and extra expense—extra expense only coverage

There are four major categories of ocean marine insurance:

a. Hull insurance covers the physical damage to the ship or vessel. It is similar to automobile physical damage insurance.

b. Cargo insurance protects the shipper of the goods against financial loss if the goods are damaged or lost.

c. Liability insurance is also provided by protection and indemnity insurance.

d. Freight insurance indemnifies the shipowner for the loss of earnings if the ship is damaged or lost and the goods are not delivered.

Commercial property that can be insured by inland marine contracts are the following:

a. domestic goods in transit b. property held by bailees c. mobile equipment and property d. property of certain dealers e. means of transportation and

communication

The inland marine forms that are filed with state insurance departments include the following:

a. accounts receivable coverage form b. camera and musical instrument dealers

coverage form c. commercial articles coverage form d. equipment dealers coverage form e. film coverage form f. floor plan coverage form

g. jewelers block coverage form h. mail coverage form i. physicians and surgeons equipment

coverage form j. signs coverage form k. theatrical property coverage form 1. valuable papers and records coverage

form

The businessowners policy is a package policy for smaller business firms.

It covers the building, business personal property, loss of income to the firm, and liability exposures.

Optional coverages include coverage for outdoor signs, money and securities, employee dishonesty, and mechanical breakdown.

Commercial liability insurance is also provided.