Property insurance is an important form of insurance for businesses to consider. However, as with most contractual obligations, there is quite a bit of fine print involved when it comes to property insurance policies. Instead of becoming lost in the subtle nuances and specifics of a property insurance policy, arm yourself with an education of important and popular key terms and concepts that will allow you a broader and more thorough understanding of the key concepts used in the world of property insurance.
A named-perils policy is very limited in what it will cover. Such policies will cover only losses and damages that occur to a property as a result of specific perils named in the insurance policy on the property.
Business owner's package policy
A business owner's package policy, abbreviated as a BOP, is a bundle insurance package. The package covers not just property insurance, but also liability insurance. BOPs offer one affordable premium with broad coverage, intended to appeal to small businesses.
An experience rating is an indication of an individual's or business' history of insurance claims. This rating may be good or bad, and it will affect the average premium a business is charged.
The retroactive date is found on a claims-made policy. It states specifically when the policy was formed and what the policy period is for the insurance coverage. Any loss that occurred prior to the policy date takes place on a retroactive date and will not be covered by the policy.
Actual cash value
A property insurance policy's actual cash value is abbreviated as ACV. The ACV of the policy is the replacement costs minus the lost or damaged property's physical depreciation.
Commercial genera-liability insurance
Commercial general-liability insurance, also known as CGL insurance, is a basic liability policy. It covers bodily injury as well as property damage that has occurred. Still, many businesses opt to supplement their CGL insurance with other forms of insurance, such as workers compensation.