Commercial Property Insurance
Pennsylvania commercial property insurance provides coverage to a business for damage to their building or business personal property and can provide lost business income in the event of damage to the insured’s building or equipment. Policies cover similar types of losses resulting from fire, water, smoke damage, and building collapse. The method of how the policy pays for the loss is most important and requires a specialist in Pittsburgh commercial property insurance to recommend what is the best coverage for an insured.
Building and business personal property insurance is written using one of four valuation methods, Coinsurance, Replacement Cost, Actual Cash Value, and Stated Value.
Coinsurance means the limit of insurance bought must equal a selected percentage (80, 90 or 100 percent) of the replacement cost of the property. If the correct amount is purchased; the insured will be fully covered for the loss, if less than the proper amount is purchased, the insured suffers a coinsurance penalty and is responsible for a portion of the loss over the deductible.
Replacement Cost means that a loss will be settled based upon replacing the damaged property with property of “like kind and quality” up to the limit of insurance.
Actual Cash Value
An ACV policy will pay for repairing or replacing the damaged property minus depreciation. Depreciation is the amount deducted based upon age and wear and tear of the property.
A commercial property policy written with a “stated value” clause eliminates the Coinsurance penalty in the event of a loss. With this coverage it is important that the full replacement cost limit of the property is selected in order that the insured is fully covered in the event of a total loss.
Each of the above four policy valuations have different insurance premium charges and a Pittsburgh commercial property insurance professional can provide proper recommendations on which coverage is best for an insured.
Rates per $100 for PA commercial property insurance are lower for buildings than they are for the contents within the building. This is because business personal property is subject to loss by theft more than the building. Insurance companies have different definitions of what is considered ‘building insurance coverage” and what is business personal property insurance. A specialist in Pennsylvania commercial property insurance can provide insurance quotes based upon each company’s qualifications in order to provide the best savings and coverage for an insured.
Replacement Cost vs. Market Value
Commercial property business insurance requires that the insurance limit be equal to the replacement cost of the property. Many times this limit can be higher than the current “market value” of the property. The insurance company pays to repair or replace the damaged property not based on what the property can sell for.
Inland Marine Insurance
Business personal property insurance coverage is usually limited to equipment or stock while on the insured’s premises. Many businesses have equipment that is not stationary and is typically transported from place to place away from the insured’s premises. Examples would be mobile equipment of a contractor, or a contractor’s tools, a salesman’s traveling samples, exhibition or convention sales displays. Equipment of this type that is highly mobile is best covered under inland marine insurance policies, or “floaters”. There are many different types of inland marine insurance all types of property. What types of losses they cover, and how the policies value the property and where the property is covered can vary greatly.
A PA commercial property insurance specialist will recommend the best business insurance policy to provide an insured with the most protection for the least cost.