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Commercial property – different forms of coverage (basic vs. broad vs. special)

Many business owners purchase commercial property insurance for their buildings, but rarely do they know what they are buying. There are 3 different forms of coverage: Basic, Bread and Special.

It makes sense that Basic has the least amount of coverage and Special has the most, so the more coverage you get, the more expensive the coverages will be, but is it worth the extra cost for the extra cost to get the extra coverages. As a business owner, it is your decision.

To make it easy to see the coverage differences, we’ve included the chart below:

Cause of Loss Forms ̵
1; Comparison Chart

Blog - Cause of Loss Forms - Comparison Chart

* Windstorm or hail, vandalism and sprinkler leakage can be excluded individually by recommendation
** Exception for vehicles owned/driven by named insured

Although the chart includes the types of losses typically covered by each policy type, be sure to review these coverages with your agent. Ask your agent if the policy is covered by a busy or excess and surplus company. Standard business policy forms are reviewed and approved by the state, but surplus and surplus companies are not required to file their policy forms with the state, so be careful when purchasing these policies and review any exceptions with your agents. For example, some surplus and excess companies will offer specialty coverage, but exclude water damage and/or theft coverage.

Other policies to consider with commercial property insurance

You may have noticed that the broad and special form covers water damage, but not flood. To clarify, water damage would be the bursting of a water pipe, but flooding is the appearance of surface water caused by an external source such as heavy driving or a storm surge.

Flood policy can be purchased separately. Even if you’re not in a flood-prone area, it’s a good coverage to consider. The National Flood Insurance Program has stated that 40% of claims come from areas with moderate to low risk of flooding.

Finally, we strongly recommend adding Business interruption coverage to your Commercial Property Policy (also known as Business Income and/or Extra Expense Coverage). This coverage provides any loss of income that may occur if you have a covered loss that causes your business to close or relocate during the time it would take to repair your building.

If you are interested in a quote or would like to discuss your commercial property coverage needs, please call us at 352-333-3775 or email us at commercial@saiains.com.

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