Fine Print Guide

Most businesses start here · CP, causes of loss forms

Commercial property

Pays to repair or replace your business's building, equipment, furniture and stock after damage from a covered cause, like fire, storm or theft.

Who it's for
Businesses that own a building, or have equipment, furniture or stock worth protecting, including tenants who made improvements.
Is it required?
Not by law. Lenders require it on buildings, and leases often require tenants to insure their improvements.

Usually covered

  • The building, if you own it or your lease makes you responsible
  • Business personal property: equipment, furniture, computers, stock
  • Improvements you made as a tenant
  • Other people's property in your care, up to a limit

Usually not covered

  • Flood and earthquake
  • Equipment breakdown, like a failed compressor, unless you add it
  • Spoiled food from a power outage, unless you add spoilage coverage
  • Money and securities, which need a crime policy
  • Wear and tear
  • Property that's often away from your premises, which needs inland marine

Real-life examples

A break-in: laptops and stock are stolen.

Usually covered

Theft of business property is covered under the "special" causes-of-loss form, minus your deductible.

A power cut spoils $8,000 of food in a restaurant's freezer.

It depends

Only if you added spoilage coverage. If a covered storm damaged your own power line, some policies pay.

Causes of loss: basic, broad, special

Like home policies, business property policies either list the causes they cover (named perils) or cover all causes not excluded (open perils).

BasicBasic formA short list of causes

Fire, lightning, explosion, wind, hail, smoke, aircraft, vehicles, riot, vandalism, sprinkler leakage, sinkhole collapse and volcanic action.

BroadBroad formAdds a few more

Adds falling objects, weight of snow or ice, water damage from broken systems, and some collapse.

SpecialSpecial formAny cause not excluded

The broadest, and the most common for small businesses. Includes theft.

Good to know

The coinsurance trap

Most policies have an 80% coinsurance clause: if you insure the property for less than 80% of its value, even partial claims are cut in proportion. Keep limits up to date as prices rise.

Check your own policy

Find these on your policy or declarations page, or ask your agent:

  • The causes-of-loss form
  • Limits for building and contents, compared with today's values
  • Coinsurance percentage
  • replacement cost or actual cash value
  • Add-ons: equipment breakdown, spoilage, signs

Not sure where to look? See how to read your policy.

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