FIN 461 CHP 1 & 2 COMMERCIAL PROPERTY

BUILDING AND PERSONAL PROPERTY

TYPES OF PROPERTY

• TANGIBLE

• INTANGIBLE

TANGIBLE PROPERTY

• SOMETHING YOU CAN TOUCH

• CAN BE VALUED AND ASSESSED

• EX: COMMERCIAL PROPERTY - PHYSICAL BUILDINGS

INTANGIBLE PROPERTY

• SOMETHING YOU CANT TOUCH

• ITS INTELLECTUAL PROPERTY

• CAN BE INSURED WITH CRIME POLICY

• CANT BE INSURED WITH PROPERTY POLICY

• EX: COCA-COLA RECIPE

TYPES OF PHYSICAL PROPERTY

1. PERSONAL PROPERTY: ALL TANGIBLE OR INTANGIBLE PROPERTY THAT IS NOT REAL PROPERTY (CAN. BE MOVED AROUND)

2. REAL PROPERTY: TANGIBLE PROPERTY CONSISTING OF LAND AND ANYTHING PERMANENTLY ATTACHED TO IT

PERSONAL PROPERTY (PHYSICAL)

ALL TANGIBLE OR INTANGIBLE PROPERTY THAT IS NOT REAL PROPERTY (CAN BE MOVED AROUND)

• VEHICLES

• MERCHANDISE

• FURNITURE

REAL PROPERTY (PHYSICAL)

TANGIBLE PROPERTY CONSISTING OF LAND AND ANYTHING PERMANENTLY ATTACHED TO IT

• BUILDINGS

• DRIVEWAYS

• SIDEWALKS

• UNDERGROUND PIPING

• RADIO TRANSMISSION TOWERS

3 CATEGORIES AND EXAMPLES OF COVERED PROPERTY UNDER BPP

• REAL PROPERTY/ BUILDINGS

• BUSINESS PERSONAL PROPERTY

• PERSONAL PROPERTY OF OTHERS

REAL PROPERTY/BUILDINGS

ACTUAL STRUCTURE AND ITEMS PERMANENTLY ATTACHED INSIDE IT

• COMPLETED ADDITIONS TO COVERED BUILDINGS

• FIXTURES

• PERMANENTLY INSTALLED MACHINERY AND EQUIPMENT

BUSINESS PERSONAL PROPERTY

ITEMS WITHIN THE BUILDING AND NOT ATTACHED TO HELP RUN DAILY OPERATIONS

• OFFICE CHAIRS/DESKS

• COMPUTERS

PERSONAL PROPERTY OF OTHERS

ITEMS BELONGING TO CUSTOMERS OR WORKERS THAT ARE LEFT AT THE BUSINESS

• CLOTHES LEFT AT A DRY CLEANER

ADDITIONAL COVERAGES

EXTRA PROTECTIONS BUILT INTO THE POLICY THAT PAY FOR EXTRA EXPENSES THT HAPPEN AFTER DAMAGE OCCURS THAT GOES BEYOND FIXING OR REPLACING PHYSICAL PROPERTY

• DEBRIS REMOVAL (ONLY AT SPECIFIED LOCATION)

• ELECTRONIC DATA (COVERS LOST FILES)

• POLLUTION CCLEAN UP AND REMOVAL

FACTORS AFFECTING COMMERCIAL PROPERTY PREMIUMS

• CONSTRUCTION: MATERIAL THE BUILDING IS MADE OF

• OCCUPANCY: HOW THE BUILDING IS USED

• PROTECTION: HOW CLOSE BUILDING IS TO FIRE HYDRANTS

• EXTERNAL EXPOSURE: RISK AROUND BUILDING

• LOCATION: IF BUILDING IS NEAR AN AREA PRONE TO DISASTER

PARTIES AFFECTED BY PROPERTY LOSS

1. INSURANCE COMPANY

2. MORTGAGE COMPANY

3. OWNER OF PROPERTY

4. BANK WITHHOLDING THE PROPERTY NOTE

BPP POLICY EXCLUSIONS

SPECIFIC EVENTS, ITEMS, OR TYPES OF DAMAGE THAT THE INSURANCE COMPANY WILL NOT PAY FOR UNDER A STANDARD BUSINESS PROPERTY POLICY

• NUCLEAR HAZARD

• THEFT

• FLODS

• POWER OUTAGES

COINSURANCE

A RULE REQUIRING A BUSINESS TO BUY INSURANCE EQUAL TO A CERTAIN PERCENTAGE OF THEIR PROPERTY’S TOTAL VALUE