Commercial Property Insurance

Commercial property policies aren't standardized in Texas. Although insurers are required to meet minimum requirements, they still have flexibility to develop their own policies. This means the coverage options and packages can vary significantly by insurer and by policy.

Commercial packaged policies (CPP) combine multiple coverages, such as commercial property, liability, inland marine, and commercial auto, to ensure full protection within the convenience of a single policy. CPP policies typically have lower premiums than purchasing the coverages individually.

Business owner policies (BOP) are a common type of commercial multi-peril policy primarily for small businesses. BOP policies combine property and liability coverage in one policy.

Commercial property policies also provide various types of policy "endorsements." Endorsements can expand or amend a policy's coverage options, but they also can cost extra. If endorsements aren't for you, you can also purchase certain coverage options as stand-alone policies.

How does commercial property insurance help?

 Following are some typical commercial property coverages:

• Building occupied by the insured coverage insures a building that you regularly use but do not own. This coverage can be important if you lease or borrow a building that is critical for your operations.
• Newly acquired or constructed buildings coverage insures a new building if you add it to your policy within a specified amount of time. If you don't notify your insurer within the time period – usually 30 days – your policy won't cover the new building. Commercial property policies generally only cover buildings named in the policy.
• Employees' personal property coverageinsures your employee's personal property against covered losses if the property is on your premises. Generally, you must buy this coverage as an endorsement if you need more than a limited amount.
• Off-premises property coverage covers your property located off site. Some policies might not cover off-premises property, or may provide only limited coverage. You can usually buy an endorsement to cover off-premises property. If you can't buy an endorsement, you may have to buy a separate policy.
• Business interruption coverage pays for actual or projected lost income along with expenses associated with recovery if there is a large disaster.
• Extra expense coverage pays any additional costs to expedite resumption of your operations after a covered loss.
• Valuable papers coverage provides limited coverage of your business records and other essential information. You may be able to buy an endorsement to increase this coverage.
• Ordinance or law coverage pays any additional costs required to repair or rebuild a facility damaged by a covered peril in order to comply with current building codes. Many policies provide limited ordinance coverage, but you can increase it with an endorsement.
• Equipment breakdown coverage covers boilers, air conditioning units, compressors, steam cookers, electric water heaters, and similar machinery. Coverage generally extends to machinery specifically listed in the policy and to any subsequent losses, such as when a boiler explosion or water heater leak causes damage to other property. You can usually purchase this coverage as either an endorsement or a separate policy.
• Inland marine coverage insures goods in transit over land, by air, or by inland waterways. It also covers projects under construction and transportation and communications structures, such as bridges, tunnels, and communications towers.

Different types of commercial property insurance policies protect against different risks. Some policies will only cover specific risks that are listed in the policy while other cover all risks by default , unless the policy specifically excludes them. Be sure to read your policy carefully, as you may need to buy additional coverage for issues such as floods, windstorms and crime in order to fully protect your business.

Commercial property insurance policies in Texas generally fall into one of three categories:

• Basic Commercial Insurance form policies typically cover common risks, such as damage from fire, lightning, windstorm, vehicles, aircraft, or civil commotion.
• Broad Commercial Insurance form policies typically provide basic form coverage plus coverage for additional issues, such as water damage, structural collapse, sprinkler leakage, and losses caused by ice, sleet, or weight of snow.
• Special Commercial Insurance form policies cover against all types of losses, with the exception of a peril the policy excludes specifically. Common special form exclusions include losses from flood, earth movement, war, terrorism, nuclear disaster, wear and tear, and insects and vermin.