Business Insurance Coverage

As opposed to a named peril basis, most property insurance is written on an all-risks basis. Named peril basis offers coverage for specific perils already named on the insurance policy. That means any losses coming from an un-named peril are not covered by your specific policy. If you need a specific peril covered, you may have to ask for an addition to the policy.

You want to make sure that you get all-risks coverage. Carefully go over the list of the policies exclusions. These are things NOT covered by the policy, and are often specifically excluded. Every policy will cover any losses due to a fire, but what about an explosion, or maybe a hailstorm does significant damage? Make sure that the insurance you're purchasing is relevant to the geographic location and environment of the business, or purchase the additions necessary.

You should also buy replacement cost insurance whenever possible. This will pay enough to replace your property, even at today's inflated prices. But, you must be sure that your total replacements don't surpass the policy cap. You can also buy this type of insurance with an inflation guard, which will allow the adjustment of the policy cap. When this isn't possible, be sure to review and know all the limits of your policy, making sure you're still adequately covered. Also be sure to keep all property value records updated.

Business Interruption

In the event that a disaster or loss puts your business out of operation for any amount of time, your basic property insurance will cover the damages and losses. Well, you still have bills to pay, and people to pay, and your business is still not operational. Business Interruption will cover the fixed costs and all the income that you are losing while your business isn't functioning. Beware of the waiting period—make sure you talk to your agent about it eliminate it from your policy.

Umbrella Coverage

You have your four basic groups of general liability, workers' comp, auto and property/casualty coverage. Many insurance agents will urge the purchase of an additional protection layer called an umbrella policy. This will protect you in the event that a claim surpasses your current coverage.