In California, people who start a business must have a comprehensive plan, an effective staff, financing and a product or service that can make it a success. Often, however, people forget about a key factor that can make or break them: insurance. Even those who do have insurance are confronted by challenges if they try to make a claim. For those who have commercial property, it is vital to have sufficient coverage. In addition, understanding what the insurer is obligated to replace or pay for if the unexpected occurs is also imperative. In some instances, the insurance company might try to say that loss, damage or outright destruction is not part of the policy. In these instances, having guidance may be necessary.
How are buildings, business property and personal property covered under a policy?
In general, a business – even those that people are running from their home – will have a building of some sort. These must be insured. This is true whether it is a leased property or owned. This can be separate in an Individual Line Policy or part of a Commercial Package Policy (CPP) in which there are at least two covered parts involved. With a building, the structure and additions are included. When there is an accident and damage is incurred, the coverage will be based on an estimate of the damage to replace that which was lost.
If there was equipment, fixtures and more, it should be paid for by the insurer. This is business personal property. Personal property itself belongs to others and was in the care and control of the business. If, for example, it is an auto mechanic and customers’ vehicles are damaged in an accident or incident, then the personal property insurance is expected to cover it. Owners must remember that the entire building must be insured based on its value or there could be a shortfall in coverage.
Problems with commercial property insurance may require professional advice
Business owners might think they have enough insurance coverage, they have adhered to insurance law and there will not be a problem in receiving compensation from the insurance company if the unfortunate occurs. Still, there are often disagreements over language in a policy. People who are confronted by an insurance company that is claiming the language is not specific to cover the claim or deny the entire claim outright should have assistance with assessment and ensuring that the loss is covered as the policy stipulates. Discussing the case with those experienced in helping with insurance disputes is a wise first step.