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Back to the Basics: Contractor Commercial Property Insurance


property insurance claimDay 3 of “Back to the Basics” is going to cover Contractor Commercial Property coverage.  While there are several lines of coverage that cover various types of property and equipment, today’s post will specifically cover your buildings that you operate out of and store your machinery and equipment in.  Later in our 13 part series, we’ll be addressing contractors equipment, property in transit, inland marine exposures, and builders risk.





What is it?

Contractor commercial property insurance is designed to cover damage to your existing buildings and the property inside and within 100 feet of these buildings. This policy covers claims for losses or damages in connection with the physical aspects of your facilities.  And this coverage will only pay on losses for direct physical loss or damage from a covered cause to covered property that is located at the premises covered in your policy.  Builders risk will be discussed next week to address property that is still under contruction.

Why should my construction company carry it?

We all show up to our offices every morning with the expectation that the office and everything inside of it will be just like we left it the night before.  However, pesky things like fires, wind, falling trees,  lightning, hail, smoke damage, vandalism, leaky sprinklers, and collapse(from specified causes) can sometimes disrupt this.  And that’s where property insurance comes in.  Several of the perils that property insurance covers are due to mother nature, and she has been consistently known to thwart even the most comprehensive loss prevention strategies.  There are things that can happen to your building which most property policies will not cover.  Such as wear and tear, mechanical breakdown, boiler explosion, FLOOD, sewer backup, snow/water damage to property outside,  theft of building materials, off premises utility service interruption, and others depending on who your company has as an insurance carrier.  Some of these exclusions can be added to a policy by endorsement or another insurance product.  Give your agent or broker a call to discuss what your options are.


Types of Claims:

Each policy is different.  And each policy will cover and exclude different perils (causes of loss).  Property coverage has many nuances and options depending on where you are located, so please review your own policy, covered perils and exclusions with your agent.  Please note also, that property and contents coverage usually has low limits on currency, software, intellectual property, and DOES NOT COVER EMPLOYEE THEFT OR DISHONESTY.  Other insurance products are available to cover some of these risks, but do not assume that your property policy fully covers every piece of property under your roof.


Loss Control Suggestions:

Sprinklers are great for stopping fires from spreading and to get a discount on your property insurance.  Security systems and exterior lighting are great for thwarting thefts and vandals and also help with insurance discounts.  Don’t allow employees to smoke inside or burn candles, incense, etc.  Use caution during the colder months when utilizing space heaters.  If snow is building up on your roof like it was in Connecticut this year, clean it off periodically.  If you have combustible materials in your shop or garage, make sure they are disposed of and stored properly.  Common sense goes a long way in preventing many property losses.  If you wouldn’t do it at home, don’t do it at work.  A parting tip for you is to read the property section of your insurance policy.  As far as insurance policies go, the perils and exclusions section of most commercial property policies are the most straight forward and easy to read.  Most are clear on what is and what isn't covered.  Questions on whether you have coverage for a certain peril?  Call your agent.  We're here to help, and preventing uncovered claims is a lot more fun than telling our clients they are going to have to pay for a  new building with their own checkbook rather than the insurance company's.

Dan Phelan runs the marketing department at Construction Risk Advisors when he's not out helping his clients with risk management and insurance issues.  If you want to connect on twitter, he's at @fixyourrisk and here on Facebook

dan phelan litchfield insurance group

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