Insurance Business Owners Need

Insurance business owners need additional property coverages in most cases. Besides the specific contents, inventory, or business personal property that is listed in the policy, there are some additional property coverages that are usually included in all insurance policies. The additional coverages usually have low limits and that is what you need to be aware of. You can usually expand on those supplemental coverages if your situation warrants it.

Debris removal is a very common coverage with its own supplemental coverages that are added to the property insurance policy. Sometimes it can be a percentage of the building limit or contents values. Usually 5% for debris removal would be a standard percentage amount that would be used. The supplemental for trees, shrubs and landscaping is usually around $5,000 or $10,000. Clearly if you have a large building structure the 5% might be too low of a figure. Also, if you have extensive landscaping designs those sublimit amounts might be too low if the landscaping becomes damages from vandalism, wind, flood, etc.

In the United States the differing states, counties, and municipalities, have their own unique laws with regards to public protection. Usually it is in rural areas where government entities charge the property owner for public service calls to their property such as the fire department. Clearly the insurance company wants the fire department to respond to all potential fires to help mitigate the damages and losses for the insurance company’s client. Most all property insurance policies have a provision to provide coverage for fire department service charges if any. Normally the supplemental coverage is from $1,000 to $10,000.

Typically property insurance policies exclude coverage for any type of environmental claims or losses. Many insurance companies have gone from an exclusion of environmental impairment liability claims to a sublimit (maybe $5,000) on paying pollution cleanup and removal coverage as a supplemental coverage to prevent litigation. By placing a sub limit for environmental claims, pollution claims etc., the insurance company is limiting their exposure to pollution areas of coverage. Instead of insurance company fighting with the insured about whether not this is a pollution claim by having a pollution coverage endorsement with reduced limits of coverage the insurance company adverts complex litigation over coverage issues.

Some of the other additional coverages and/or supplemental coverages that are found in property policies have to do with newly acquired properties. Usually there is a time limit from start to finish whereby the insurance company will grant automatic coverage to newly acquired buildings or contents and/or land. Typically there is a 90 to 100 day grace period whereby there’s automatic coverage before you as the insured must notify the insurance company specifically to add the newly acquired property. The insurance company typically has a supplement for the newly acquired properties. Usually that can be anywhere from $100,000 to $2 million. That supplement varies by carrier substantially across the United States.

In summary, while there are a lot of coverages built into the business owners’ policy, it is the sub-limits of supplemental coverages that need to be reviewed. You might have coverage in the sub-limits but the amount of coverage is usually very limited.

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