A Brief Overview of the Commercial Property Policy and How It Applies to Your Business

No matter the size or type of business, tangible property is a major asset. A national standard for insuring such property is the Insurance Services Office (ISO) Commercial Property Program.

The Commercial Property Program may be written either as a single (monoline) policy, covering only buildings and property, or as a package policy, providing property, liability, and other important protection for your business.

The Parts of A Commercial Property Policy

A Commercial Property Policy is flexible because it consists of several basic parts or forms:

• Declarations Forms - describes who is covered, the amount of insurance, the type of coverage written, other information about the business, and other identifying details.
• Conditions Forms - contain sets of conditions that control how the policy operates, such as the customer's duties when a loss occurs, the method used for settling a loss, or what steps to take when the customer and the insurer disagree over the amount of a loss.
• Coverage Forms - include descriptions of the type of property that is covered or excluded, and explain items such as coverages, insurance limits, definitions, deductibles, and other important provisions.
• Causes of Loss Forms - as you might expect, these forms describe the causes of loss (perils) that are insured against and any exclusions.
• Policy Cover or Jacket - this is, literally, a cover designed by the company providing the policy, and it usually includes a table of contents or an index.

The basic parts above can be modified or supplemented to better fit different types of businesses by adding a wide variety of optional coverage forms called endorsements.

Causes Of Loss Forms

The following Causes of Loss Forms are available under the Commercial Property Policy:

• BASIC - protects against Fire, Lightning, Explosion, Windstorm, Hail, Smoke, Aircraft or Vehicles, Riot or Civil Commotion, Sprinkler Leakage, Vandalism, Sinkhole Collapse, and Volcanic Action
• BROAD - adds several additional covered causes of loss over the Basic Form, including Breakage of Glass, Falling Objects, Weight of Snow (or Ice or Sleet), and Water Damage.
• SPECIAL - provides coverage for "special perils," which essentially covers anything not otherwise excluded.
• EARTHQUAKE - covers earthquake shocks or volcanic eruptions that occur within any 168-hour period.

What Commercial Property Policy Covers

A Commercial Property Policy covers the building, completed additions, fixtures, permanently installed machinery and equipment, personal property that is used to service or maintain the building or premises, and, under certain circumstances, construction equipment, material, and supplies.

Under personal property, the Commercial Property Policy covers furniture and fixtures, machinery, equipment, stock, and all other personal property owned by the insured and used for business, labor, materials, or services furnished or arranged by the insured on the personal property of others, any improvements and betterments made by or acquired by the insured (when a tenant), and any leased personal property the insured has a contractual responsibility for. The Commercial Property Policy also covers property that is outside if it is in the open or in a vehicle that is within 100 feet of the premises.

What the Commercial Property Policy Does Not Cover

Like any insurance policy, there are items that are not covered. A Commercial Property Policy does not provide coverage for accounts, bills, currency (and similar property), animals, automobiles held for sale, bridges, roadways, walks, patios, contraband, property being transported by air or over waterways, land, crops, underground property, most vehicles, expenses related to replacing company records and other property, and more.

This is a very brief discussion of the Commercial Property Policy. If you need more information, help is nearby. Contact one of the expert agents at Williams Insurance to discuss your coverage needs.