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Small Business Property Insurance Continued from << Previous Page
Coverage is limited to $2,500 for furs, watches, jewelry, precious metals, patterns,
dies, molds and forms. If additional coverage for such property is needed, it can
be purchased separately.
Earthquake and Volcano Coverage – You may add this endorsement
to your BOP to protect your business property from losses due to these perils. A
different method of calculating deductibles, as a percentage of the coverage rather
than as a flat dollar amount, may apply to this coverage.
Electronic Commerce – If
your business relies on e-
Electronic Commerce to your BOP. The insurer covers your lost income and extra expenses
in the event your ability to conduct e-
Most experts agree that businessowners tend to greatly underestimate
their vulnerability to theft by their own employees. According to the Association
of Certified Fraud Examiners (ACFE), the average business loses 6 percent of its
total annual revenue to employee fraud. The ACFE says smaller companies, particularly
those with fewer than 500 employees, are most susceptible to these losses. Virtually
any business with employees is at risk of losses caused by employee dishonesty. As
with other causes of loss, effective loss control measures can go a long way toward
reducing this loss exposure.
Employee Dishonesty Insurance covers losses caused by
temporary or leased workers as well as employees. Many employee fraud schemes go
on for years before they are detected. If you have added this coverage to your BOP,
your insurer will pay for a covered loss or damage sustained during the policy period
and discovered no later than one year from the end of the policy period.
Food Contamination
– If you are involved in a food business, there is always some risk that food you
sell could cause food poisoning or transmit a communicable disease from an employee
of your business. This risk can, of course, be reduced and controlled by following
a good risk management plan, but it can never be totally eliminated.
The Endorsement
for Food Contamination provides coverage for most of the expenses you would incur
if food you sold caused food poisoning or disease. Coverage includes the cost of
additional advertising to restore your reputation.
Mechanical Breakdown – This option
provides coverage for mechanical or electrical breakdown to your boilers, pressure
vessels, refrigeration systems, piping, and mechanical and electrical machines or
apparatus that generate, transmit or simply use mechanical or electrical power. For
many businesses that depend on such equipment, a breakdown means the inability to
operate and loss of income. If you run a sawmill and the saw breaks down, for example,
you’re effectively out of business until the saw is repaired. Mechanical breakdown
coverage might be a wise investment to cover this type of risk.
Money and Securities
– You have the option to add coverage for money and securities to your policy. The
insurer covers the property on the business premises, while it is at a bank or savings
institution, when it is in the custody of any employee or businessowner in his or
her living quarters or while it is in transit between any of these places.
More Coverage
for Valuable Papers and Records – As part of your loss control plan, to the extent
feasible, you should keep backup copies of records in a separate location and valuable
papers in a fire proof safe or a bank safety deposit box.
For some businesses, however,
it may be in the nature of the business that certain valuable papers and records
are vulnerable to property loss. Should you lose valuable papers and records as the
result of a covered cause of loss, your basic BOP will pay the expense, up to your
policy limit, to reconstruct the records.
If needed, you may add more coverage to
your BOP for the cost to reconstruct valuable papers and records, including those
that exist on electronic media. The covered property includes documents, manuscripts
and records (including abstracts, books, deeds, drawings, films, maps or mortgages).
It also includes electronic data processing, recording or storage media; data stored
on such media; and programming records used for electronic data processing or electronically
controlled equipment.
Newly Acquired or Constructed Property – If your policy covers
buildings, you may extend the coverage to newly acquired buildings intended for similar
use as the insured building or as a warehouse. This coverage also applies to new
buildings while being constructed on the premises described in your policy. Any newly
acquired business personal property is also covered. This is temporary coverage that
provides time to report the new property to your insurer. The coverage expires 30
days after you acquire the property or begin construction.
Outdoor Property – You
may extend your policy’s coverage to apply to outdoor items, including signs, fences,
shrubs and plants, and satellite dishes. Debris removal of these items is included.
The most the insurer will pay under this extension is $2,500 and not more than $500
for any one tree, shrub or plant.
Outdoor Signs – For some businessowners, the only
outdoor asset not covered by their basic BOP that they wish to insure is outdoor
signs not connected to their building. The BOP provides an option to add just this
coverage.
Personal Effects – You may extend your coverage to apply to personal effects
owned by officers, managers and anyone who works at the company. There is a $2,500
limit on this coverage. It does not apply to loss or d
By the Insurance Information Institute www.iii.org
Business and Commercial Property Insurance
