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Commercial Building Insurance
Insurance for Mixed-Use & Commercial Properties
Commercial Property insurance covers everything related to the loss and damage of property due to a wide-variety of events such as fire, smoke, wind and hail storms, civil disobedience and vandalism.
Types of Commercial Building Insurance
- Basic form policies typically cover common risks to commercial and mixed-use buildings.
- Broad form policies typically cover the common risks in addition to water damage, structural collapse, sprinkler leakage, and damage caused by ice, sleet, or weight of snow.
- Special form policies cover all types of risks except those the policy specifically excludes. Common exclusions include damages from flood, earth movement, war, terrorism, nuclear disaster, wear and tear, and insects and vermin.
Basic and broad form policies generally cover risks faced by the average small business, while special form policies are usually purchased when there is high risk of peril in a certain area.
Fire risk is typically the primary factor that determines commercial property rates. State-licensed fire inspectors contract with insurance companies to perform inspections as part of the underwriting process. Inspectors use a standard rating system to determine a structure's fire rating.
Specific Coverages for Building Owners
Commercial property policies provide various types of coverage, either as part of the base policy or through policy endorsements. Endorsements expand or amend a policy's coverages and usually increase your premium. You can buy certain coverages as separate standalone policies.
Building occupied by the insured coverage insures a building that you regularly use but do not own. This coverage can be important if you lease or borrow a building that is critical for your operations.
Newly acquired or constructed buildings coverage insures a new building if you add it to your policy within a certain amount of time. If you don't notify your insurance company within the time period - usually 30 days - your policy won't cover the new building. Commercial property policies generally only cover buildings named in the policy.
Chicago Ordinance or law coverage pays additional costs to repair or rebuild a facility to current building codes after it's damaged. Many policies provide limited ordinance coverage, but you can increase it with an endorsement.
Boiler and machinery coverage covers boilers, air conditioning units, compressors, steam cookers, electric water heaters, and similar machinery. Coverage is generally only for machinery listed in the policy and to any subsequent losses, such as when a boiler explosion or water heater leak causes damage to other property. You can usually purchase this coverage as either an endorsement or a separate policy.
Crime Coverage may pay losses from crime on either a loss sustained or discovery basis. Loss sustained coverage pays for losses that happened during the policy period, and discovery coverage pays for losses that happened at any time. Both types of crime coverage require that you learn about the crime during the policy period or extended reporting period.