Commercial Property Insurance

1
Commercial Property Insurance

• Chapter 10
• Business Property Insurance
• Appendix C
• Building and Personal Property Coverage Form

2
Property Risk Management

• Property loss - any loss that a person or
  organization sustains as a result of the
  damaging, destruction, taking or loss of use of
  property in which that person or organization has
  a financial interest
• Risk Management Process
• 1 - Identify and analyze loss exposures
• 2 - Examine the feasibility of alternative risk
  management techniques
• 3 - Select the best risk management technique
• 4 - Implement the technique
• 5 - Monitor the program

3
Identify and Analyze Loss Exposures

• Property Loss Exposures
• 1 - The item exposed to loss
• Real property
• Personal property
• Valuable information
• 2 - The cause of loss anything that could
• cause a loss to property
• 3 - The effects of loss
• Reduction in value
• Increased cost to repair or replace
• Loss of revenue
• Extra expense
• Direct loss and indirect loss

4
Overview of Commercial Property Insurance

• Insurance Advisory Organizations
• Insurance Services Office (ISO)
• American Association of Insurance Services
  (AAIS)
• Develop and file with state insurance
  departments
• Policy forms
• Manual rules
• Loss costs

5
ISO Commercial Lines Program (1986)

• Commercial property
• Building and contents (on or within 100 of
  insured location)
• Boiler and machinery
• Commercial crime
• Employee dishonesty, forgery, theft, burglary,
  robbery, extortion
• Commercial inland marine
• Elements of transportation or communication
• Property in transit, mobile equipment, property
  being installed by a contractor, bridges, radio
  towers
• Farm
• Commercial auto and liability

6
Building and Personal Property Coverage Covered
Property

• Building - Table 10-1
• Your business personal property Table 10-2
• Property owned by the insured
• Furniture and fixtures
• Machinery and equipment
• Stock
• All other personal property owned by you and
  used in your business
• Property owned by others
• Labor, materials or services furnished on
  property of others
• Improvements and betterments
• Leased personal property
• Personal property of others
• 2500 for property in the care, custody or
  control of insured

7
Property Not Covered under BPPTable 10-3

• Buildings and other real property
• Land Roadways
• Water Retaining walls
• Bridges Piers
• Plants and outdoor property
• Growing crops and lawns
• Outdoor crops
• Outdoor trees, shrubs and plants
• Outdoor fences
• Outdoor signs, unless attached to buildings

8
Property Not Covered - continued

• Other personal property
• Deeds
• Evidence of debt
• Money
• Currency
• Accounts
• Bills
• Securities and notes
• Also, food stamps
• Vehicles, Watercraft, Aircraft
• Animals
• Valuable papers and records
• Property otherwise covered (BPP is excess)
• Contraband

9
Building and Personal Property Coverage

• Covered locations
• Described locations and off premises
• Additional coverages Table 10-4
• Debris removal
• Pollutant cleanup and removal
• Preservation of property
• Fire department service charge

10
Building and Personal Property Coverage

• Coverage Extensions Table 10-4
• Newly acquired or constructed property
• Personal effects and property of others
• Valuable papers and records
• Property off premises
• Outdoor property
• Covered only for fire, lightning,
• explosion, riot or civil commotion or
• aircraft

11
Covered Causes of Loss

• Evolution
• Fire
• Fire and lightning (Standard Fire Policy)
• Extended coverage (EC)
• Vandalism and malicious mischief (VMM)

12
Extended Coverage(W.C.SHAVER)

• Wind
• Civil commotion
• Smoke
• Hail
• Aircraft
• Vehicles
• Explosion
• Riot

13
BPP Cause of Loss Options

• Basic Form Table 10-5
• Fire, lightning and extended coverages
• Sprinkler leakage
• Sinkhole collapse
• Volcanic action
• Broad Form Table 10-5
• Basic form perils plus
• Weight of snow, ice or sleet
• Water damage
• Falling objects
• Breakage of glass
• Special Form All Risk
• Includes limited coverage for theft