Insuring the Holidays Go Smoothly: It’s Time to Review Your Commercial Property Policy
Does Your Commercial Property Insurance Cover Your Seasonal Fluctuations of Inventory?
Businesses across industries, such as the service and retail sectors, see a rise in revenues and sales around the holiday season and summer and tend to increase their stock to meet this spike in demand.
Unfortunately, there are too many business owners who may not realize that not all commercial policies automatically cover increases in supplies during these busy periods.
It is crucial as a business owner to review your commercial property insurance periodically to ensure your company remains protected throughout the year, no matter your volume in sales.
In this article, we’ll discuss several features of commercial property and casualty insurance you might not have considered, including coverage for seasonal variations.
What to Look for When You Review Your Commercial Property Insurance
What Does Commercial Property Insurance Usually Cover?
Commercial property insurance protects a business’ property and its contents, such as inventory or office furniture and electronics, against loss as a result of physical damage, such as fire, theft, storms, or plumbing/electrical failures.
Commercial property insurance generally does not cover floods and earthquakes unless a business has a separate policy specifically designed for these risks.
Commercial Property Insurance Coverage: Top 3 Things You May Not Have Considered
Seasonal increase coverage. Many commercial property policies are written with set deductibles and coverage limits. This means that excess inventory ordered to meet heightened demand during busy seasons is likely not covered by your policy. Instead of inflating your premium for greater coverage year-round, you can look for a policy with increased coverage that applies only to your busiest periods. For example, at The Weiser Agency, our policies can include a 25 percent seasonal increase coverage, meaning that if you file a claim during a time of year with a seasonal increase, we can request up to 25 percent more in reimbursement for lost sales or inventory. Businesses that often benefit from seasonal increase coverage include restaurants, boutiques, and clothing stores.
Special Causes of Loss Form vs Basic & Broad Causes of Loss Form. Both causes of loss forms provide a list of what is and isn’t covered by your commercial insurance policy; however, the special form provides the broadest protection. The former lists exclusions of coverage, whereas the latter lists inclusions. This means that the special causes of loss form will cover all direct physical damage like fire, theft, etc. unless otherwise stated.
Replacement value vs actual cash value. Business policies can either cover the full cost of the new construction (replacement cost) or actual cash value (ACV) based on depreciation. This applies whether the client owns the entire commercial building or is a tenant that has invested a lot in building out their interior space. Whatever your circumstance, it covers both. While you’ll probably pay lower premiums for policies that cover actual value instead of replacement value, these policies could leave you vulnerable to higher out-of-pocket costs in the event you must build from scratch or there are no used alternatives to replace damaged equipment.
The Weiser Agency will work with your business to ensure you get the exact coverage you need at the best rate. We offer an array of commercial insurance products, including property and casualty, workers compensation, management liability, and commercial auto insurance. We’d love to have a conversation about your business insurance needs. Contact us today!