Insuring a business is tough business. An important part of your business is what you sell, and where you make, store and sell it, and you are exposed to risks like employee dishonesty, equipment breakdown, fire and theft and cyber attacks. Fortunately, a commercial insurance broker is an expert in understanding you and your business, and making sure that you have the right coverage in place to protect you.
Below are some Commercial Property Insurance coverages that are very common, regardless of the nature of your business. This review should help you to understand the coverage options available to you, and what they can do to protect you and your business!
The Typical Coverage You'll Likely To See
Commercial Building, Equipment and Stock
This section refers to the coverage for the buildings, content, equipment and stock associated with your business.
** Furniture and supplies can sometimes be considered contents of your building, depending on your policy. Be sure to have a conversation with your broker about properly protecting you **
Boiler and Machinery (also known as Equipment Breakdown)
Insurance to protect against the destructive effects of power that is accidentally released or increased and damages or shuts down your machinery. There are three types of “power”; pressure, movement and electricity. This coverage is separated into two categories:
Boilers and pressure vessels - The most common insurable perils are the explosion or rupture that causes damage to the machinery and/or to the surrounding business property, and the cracking or burning caused by a lack of water due to a control failure. Examples: boilers that produce steam for power and hot-water storage tanks.
Machinery - The insurance peril is the breakdown of machinery and equipment. a. Transformers, generators, fans and turbines are examples The coverage provides protection through an accident prevention program and financial reimbursement if an incident occurs.
Additional Commercial Coverage
Commercial Property Floater
This floater covers the property of a business that is being held or stored at a specified location (noted on the policy), at a newly acquired location by the business, while in transit within Canada and the USA, and/or in the care of a salesperson. This floater specifically protects against theft under an all-risks policy type. This coverage doesn’t provide protection for the building.
All-risks – includes all possible perils, except the ones that are specifically noted as excluded.
This policy is designed for contractors that specialize in the installation of machinery and equipment. This policy protects machinery such as heating, cooling, electrical or plumbing units that are being installed in buildings that are being built or are under construction. Coverage is provided for the property while it is in transit, awaiting installation on the job site and during installation.
Contractor’s Equipment Floater
The type of equipment that is covered under this policy depends on the type of work that you do, and the type of coverage provided to you depends on the nature of the work. However, typically this policy covers you in Canada and the USA and is subject to a deductible if you need to use it. Depending on the business type, your insurance broker will describe smaller articles on a general note, and will specifically note larger, higher value items (we call this “Scheduling” the item).
Example: If you were a carpenter, your Contractors Equipment Floater would refer to your hand tools generally, and would likely schedule high-value band saws or lathes.