Know the basics of property insurance

admin — Tue, 12 Jan 2010 17:35:10 +0000

It is an immediate acts for every offices to have their properties insured, thus seeking for a property insurance. However, despite of it, there are still a lot of people who do not fully understand the basics of property insurance.
Property insurance is the type of insurance that covers a certain business building and its contents including money and securities, accounts receivable records, inventory, furniture, machinery, supplies, and those intangible assets like trademarks, if ever damage, theft or loss occurs.
Every insurance company has its own offers. Some offers by named perils like fire and theft. Other insurance company offers a policy that covers multiple perils. Normally, basic multiple-peril policies cover losses that are caused by theft and fire. However, business owners are given the chance to purchase additional coverage if they need it. One great example of additional coverage is a coverage for snow, ice or sleet damage for those businesses in the East Coast and an earthquake insurance policy for those businesses on the West Coast. One must note though that businesses with good loss control measures and claim histories normally pay lower insurance premiums compared to those companies with risky procedures and poor claim histories. Steps in preventing for a damage or loss to occur like hiring security personnel to prevent shop lifting, having an sprinkler system installed to prevent fire or having an alarm system to protect the properties form theft are of big help in lowering the cost of property insurance.
After knowing the basics of property insurance, it is now time for us to get knowledgeable about the types of coverage this type of insurance has. Majority of the businesses are buying their property insurance through a business-owners’ policy or the one that is called the BOP. This type of coverage bundles property and liability insurance into a single policy. With the lower coverage amount the BOP has compared to a standard property insurance policy, most of the companies that require more coverage choose to have a separate policy.
Two types of the optional coverage in a property insurance policy that has the ability to protect the business after a certain loss or damage occurs are the business-interruption insurance and the extra-expense insurance. Wherein the business-interruption insurance is the one that cover the expenses like salaries, taxes, debts, and the losses incurred due to the interruption of the business operation.
The extra-expense insurance on the other hand is the one that will cover the expenses incurred while temporarily relocating a certain business when the covered peril occurs. One of the great examples of this is when a fire occurs and destroys a certain store, the extra-expense insurance will now pay for the expenses incurred to resume the operation like buying and leasing of new equipments, purchasing for new merchandise and notifying the customers for the changes of the business operation due to the incident.
With information mentioned above, hopefully, many of us are now oriented with the basics of property insurance and its type of coverage.

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Know the basics of property insurance