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What Is Property Insurance?

Property insurance is a broad term for a series of policies that provide either property protection coverage or liability coverage for property owners. Property insurance provides financial reimbursement to the owner or renter of a structure and its contents in case there is damage or theft—and to a person other than the owner or renter if that person is injured on the property.

Property insurance can include a number of policies, such as homeowners insurance, renters insurance, flood insurance, and earthquake insurance. Personal property is usually covered by a homeowners or renters policy. The exception is personal property that is very high value and expensive—this is usually covered by purchasing an addition to the policy called a “rider.” If there’s a claim, the property insurance policy will either reimburse the policyholder for the actual value of the damage or the replacement cost to fix the problem.

Most homeowners purchase a hybrid policy that compensates for physical loss or damage caused by 16 perils, including fire, vandalism, and theft. The coverage, known as an HO3 policy, has certain conditions and exclusions. There is a predetermined limit on the coverage of certain valuables and collectibles, including gold, wedding rings and other jewelry, furs, cash, firearms, and other items. No coverage is usually provided in an HO3 for accidental breakage/damage and mysterious disappearance (lost, misplaced) of valuables, including fine art and antiques.

What Is Commercial property insurance

Commercial property insurance is a form of insurance that protects the property owned by your business – your building, equipment, store fixtures, and more. It pays to replace or restore stolen items and items damaged or destroyed by fires, windstorms, and other events.

How property insurance protects your business

Property insurance is insurance for the items your business owns. If a covered event damages or destroys them, your policy will pay to repair or replace the affected items.

Typically, property insurance covers damage that results from:

  • Fire
  • Theft
  • Wind-related events
  • Acts of vandalism

Property insurance does not pay for losses such as:

  • Flood or earthquake damage
  • Employees or business partner theft
  • Damaged or stolen company vehicles
  • Theft of cash from your site
  • Losses affecting movable property (inventory, tools, or other equipment in transit)
  • Environmental damage relating to chemical pollution, oil spills, etc.
  • Equipment breakdowns from power surges, operator mistakes, or wear and tear
  • Loss of income due to not being able to operate from your building or plant
  • Product defects resulting from faulty design or manufacturing

Property insurance is often combined with general liability insurance and sold in a package called a (BOP). You can also buy separate, or add it via an endorsement to your property insurance policy. This provides cash to cover overhead after property damage makes it impossible to operate from your facility.



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