Commercial Property Insurance: Extra Protection Business Property
Securing your business assets is very important in keeping it healthy. With commercial property insurance, it gives you the protection that you need. Knowing what it can do for you before shopping for one can help you choose what’s best for you.
Basic Coverage
Insurance policies have different coverage rate and extent but the most fundamentals are covered depending on what type of circumstances is most likely to happen in your business facilities. Coverage includes:
- Computer and data
- Furniture and supplies (leased or owned)
- Office equipment, fixtures, machinery
- Records and other important papers
- Repair and improvement of the building
The types of events which are usually covered are:
- Fire
- Natural calamities like lightning and hail
- Explosions
- Civil disturbances like strikes, riots, etc.
- Damage caused by vehicles, vandalism and aircraft
Additional Coverage
What are the possible accidents that might occur in your area or inside your building? Consider the environment and the possible occurrences that your business is prone to. Having additional coverage might help you in the long run if you are able to determine the needs of your company. If you are in an earthquake-prone area, you have to consider extra protection for earthquakes. Although it will increase your premium rate it should give you peace of mind in the long run.
Valuation Types
Valuation methods are used to determine the cost and extent of the damage in your business property. There are two types depending on your business:
Actual Cash Value (ACV) – With this method, the insurer calculates for the total reimbursement value of the property or item and subtracts the depreciation value. An example would be a photocopying machine which has been with you for five years. The insurance company will deduct the depreciation for five years from the original brand new amount.
Replacement Cost Value (RCV) – With this method, the depreciation cost is not deducted from the original value, although you have to note that the premium payment for this kind of coverage is higher. You will still have the full reimbursement of the item whether damaged, worn-out or not.
You can choose either type that will help your company benefit from financially. See what type fits for you and if it still leaves you confused, discuss it with your insurance agent.
