Coverage Property Definitions

Business Income

Pays for the actual loss of Business Income sustained due to the suspension of operations due to direct physical loss of or damage to covered property caused by or resulting from a Covered Cause of Loss.


A policy may contain a coinsurance clause requiring that the limit of coverage be a minimum percentage (usually 80%) of the insurable value of your property. If the amount of insurance carried is less than what is required by this clause, any claim payment may be reduced by the same percentage as the deficiency. For example, covered property worth $100,000 may require a minimum of 80%, or $80,000, of coverage for compliance with the policy's coinsurance requirement. If only $60,000 of coverage is carried (25% less than the required $80,000), then any loss payment would be reduced by 25%.

Debris Removal

Pays expenses incurred to remove debris of covered property caused by or resulting from a Covered Cause of Loss.

Extra Expense

Pays necessary extra expense incurred as a result of direct physical loss or damage to property at the covered premise.

Fire Department Service Charge

Pays the service charges incurred when the fire department is called to save or protect covered property from a Covered Cause of Loss.

Fire Extinguisher Systems Recharge Expense

Pays the cost of recharging or replacing fire extinguishers used to extinguish a fire at the covered premise. Also pays for loss or damage to covered property resulting from accidental discharge of chemicals from a fire extinguisher or fire extinguisher system.

Increased Cost of Construction

Pays for increased costs incurred to comply with enforcement of an ordinance or law in the course of repair, rebuilding or replacement of damaged parts of covered property resulting from a Covered Cause of Loss.

Named Perils Coverage

Limits the covered cause of property loss to fire, lightning, explosion, windstorm or hail, smoke, aircraft or vehicles, or civil commotion, vandalism, sprinkler leakage, sinkhole collapse, volcanic action, and transportation. This endorsement reduces the property premium charge by 10%.

Pollutant Clean Up and Removal

Pays expenses incurred to extract pollutants from land or water at the described premise which is caused by or resulting from a Covered Cause of Loss.

Replacement Cost

Covered property is valued at the cost to repair or replace it without deduction for depreciation if the limit of insurance on the lost or damaged property is 80% or more of the full replacement cost of the property before the loss.

Special Form Coverage

Provides broad coverage for direct physical loss of or damage to covered property at the described premise caused by or resulting from any covered cause of loss.

  • Theft & Collapse

Value of Covered Property - 125% Replacement Cost

This endorsement provides up to 125% of the property limit listed in the Declarations to repair or replace damaged or lost property.

Optional Property Coverage

Employee Dishonesty (Crime II)

Pays for loss of or damage to business personal property and money and securities resulting from dishonest acts committed by any of your employees.

Equipment Breakdown

Pays for direct damage to covered property that is the result of mechanical breakdown, electrical arcing, explosion of steam boilers or pipes, loss or damage to steam boilers or pipes or loss or damage to hot water boilers or other water heating equipment. Also provides $25,000 coverage for loss or damage to computers resulting from a covered accident, loss of Business Income and necessary extra expense.

Money and Securities (Crime I)

Pays for loss of money and securities used in your business while at a bank or savings institution, within your living quarters, at the covered premises or in transit between any of these places resulting directly from theft, disappearance or destruction.

Ordinance or Law

  • Coverage 1 (Coverage A - Loss to Undamaged Portion of Building)

    Pays for the loss in value of the undamaged portion of covered property due to demolition required by an ordinance or law.

  • Coverage 2 (Coverage B - Demolition Costs)

    Pays Coverage for the cost of demolish and clear the site of debris from the demolition of undamaged covered property required by an ordinance or law.

  • Coverage 3 (Coverage C - Increased Cost of Construction)

    Pays for the increased cost to repair, reconstruct or remodel damaged or undamaged portions of covered property to comply with an ordinance or law.


Coverage for Business Personal Property - Example Furnished Apartments - Stoves, Refrigerators, Microwaves, Office Equipment & Supplies

Water Back-up and Sump Overflow

Pays for direct physical loss or damage to covered property caused by or resulting from water which backs up through or overflows from a sewer or drain or from a sump.

Liability Coverage Definitions

Aggregate Limit

Limits the total amount payable during the policy period.

Business Liability

Pays sums that the insured becomes legally obligated to pay as damages because of bodily injury, property damage, or personal and advertising injury arising out of the ownership, maintenance or use of covered premises or the insured's operations either in progress or after completion. Also provides defense for suits against the insured seeking those damages.

Definition of Insured

Defines employees and organizations or persons acting as property managers as insured's under the policy while they are acting within the scope of employment.

Fire Legal Liability

Pays for damages caused by a fire to a premise rented to or temporarily occupied by the insured.

Medical Expense

Pays medical expenses caused by an accident on the premises owned or rented by the insured, or because of the insured's operation regardless of fault.

Occurrence Limit

The most that will be paid for the sum of any one “occurrence”. “Occurrence” means an accident, including continuous or repeated exposure to substantially the same general harmful conditions.

Personal and Advertising Injury Offenses

Wrongful eviction from, wrongful entry into, or invasion of the right to private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner is a covered offense under the policy.

Non-Owned Auto Liability

Hired Auto Liability

applies to "bodily injury" or "property damage" arising out of the maintenance or use of a "hired auto" by you or your "employees" in the course of your business.

Non-Owned Auto Liability

Applies to "bodily injury" or "property damage" arising out of the use of any "non-owned auto" in your business by any person.

Example something breaks down in a unit and the tenant or on-site manager is given permission to run to the hardware store and gets in an accident, their insurance should be primary and the owners insurance would most likely be secondary.

Disclaimer - Definitions provide a general description of coverageyou must read your policy for complete definitions, limitations and coverage limit as stated in your policy forms and endorsements.

Can't find what you're looking for? Need help?

Contact Us

Color Contrast

Bigger Text

Text Align