What Are Typical Covered Losses Under a Property Policy?

Property insurance policies can vary significantly between different providers and specific policy terms, but generally, they cover a range of risks to the physical property of a business. Here are some typical covered losses under a standard commercial property insurance policy:

1.  Fire Damage: This includes damage due to fire, which is one of the most common claims for property insurance.
2.  Theft and Vandalism: Loss or damage due to theft or vandalism is usually covered. This can include break-ins or damage caused by a break-in.
3.  Water Damage: This generally covers water damage from internal sources, like burst pipes or malfunctioning sprinkler systems. Note that flooding from external sources (like rivers overflowing) typically requires separate flood insurance.
4.  Storm Damage: Damage from certain natural weather events like windstorms, hail, or lightning is usually covered. However, the specifics can vary, with some policies covering a broader array of weather-related events than others.
5.  Explosions: Damage from explosions, which can stem from gas leaks or other industrial accidents, is typically covered.
6.  Smoke Damage: If a nearby fire results in smoke damage to your property, this can also be covered by property insurance.

It's important to note that while many natural disasters might seem to be excluded, they can actually be part of the coverage depending on the specific terms of the policy or additional riders attached to the policy. Common exclusions do include high-risk events like earthquakes and floods, which generally require additional policies.

For actual policy details regarding earthquake and flood coverage, you should review the exclusions section of the property policy documents. This section will clearly list any perils not covered by the standard policy, including specifics about earthquake and flood.

Additionally, check any endorsements or riders attached to the policy, as these often provide optional additional coverage for excluded perils like floods and earthquakes. Insurance brokers can assist in navigating these details to ensure comprehensive coverage.

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11/25/2024