Commercial Property Insurance Key Terms
Learn the language of insuring commercial propertyIf you own commercial property, it's a good idea to insure it. Whether your commercial property is a building, machinery, vehicles or appliances, a solid insurance policy will protect you against devastating losses if the property is damaged or stolen.
Shopping for the right policy can be a confusing and frustrating task. It's important to learn the commonly used commercial property insurance key terms in order to purchase the best policy for your business.
Admitted and non-admitted insurance companies
Basic named perilsBusiness owners have the option of purchasing coverage only for specific damages. The covered damages outlined in the insurance contract are known as basic named perils, and may include fire, explosion, vandalism and hail. Because the coverage is limited to specific events, the insurance premium may be lower than a broad coverage policy.
Maine Bureau of Insurance.
Combined single limitWhen purchasing commercial property insurance, you will be required to select insurance limits. For example, if a customer is injured on the property, the insurance company will make a bodily injury payment. If a customer damages the building, the insurance company will make a property damage payment. If you do not want to set limitations on the specific types of payments, you can purchase a policy with a combined single limit, which will allocate payments however necessary until a total amount is reached.
Off-premises coverageOff-premises coverage provides protection for commercial property that isn't stored at the place of business. Off-premises coverage may also cover company vehicles and deposits that are en route to the bank.
Declaration pageA declaration page, often referred to as a dec page, outlines the important details of the insurance contract between the provider and the customer. A copy of the declaration page is often considered acceptable proof of insurance.
CancellationThe cancellation of an insurance policy can fall under the category of flat, pro rata or short rate. With a flat cancellation, the insurance provider returns the full premium to the customer. Pro rata cancellations result in a partial return of the premium, and short-rate cancellation requires the customer to pay an early-termination fee.
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