Considerations for Insuring Commercial Assets
The expansive nature of commercial property insurance often leaves businesses willing to only pay for what is absolutely necessary. However, instead of concentrating on the bigger picture of total insured limits or premium expenses, a smarter investment will take into account each element of coverage as it relates to whole plan.
Deductibles or Excluded Areas
As you discuss coverage options for your property, be clear on what situations are covered by a general deductible or what is associated with its own deductible. For some insurers, certain natural disasters or occasion are also considered excluded from coverage. In other cases, these same elements require a separate deductible. The situations involving both scenarios could include:
- Comprehensive peril from fire or water damage
- Business Interruption
- Earthquake/Flood/Wind/Hail/Storm damage
- Equipment Breakdown
- Per-Unit Deductible
Limits and Replacement Value
Many owners assume commercial property insurance will completely replace or reimburse the entire value of a property that has been damaged. Policies have established limits with prearranged valuation procedures. These methods are often replacement costs or actual cash value payout. Replacement costs are generally a better settlement, yet there are considerable difference to be understood when making the choice for policy inclusion.
Commercial property insurance is not a decision that should be made with a desire to simply cut cost. Investing in comprehensive coverage will better protect your assets in the long run.