What Property Insurance Won’t Cover Could Cost You
If you are starting up a new business or setting up a new office, chances are you’ve already talked to an insurance agent about the coverage you need for your business property. If you are renting an office space, the insurance requirements from the landlord should be written in your lease agreement. The type and levels of insurance coverage you need depend on many factors including the type of business you have, your location, your lease, various risk factors and more.
Property insurance for small businesses is an important component to an overall risk management plan. Insurance provides the financial assistance to continue operating your business in the event of a loss, but insurance is limited and it won’t cover all of your business property or every instance of loss.
Most businesses have a limited-coverage Businessowner’s Policy (BOP), which is a package policy covering many types of loss. The specifics of coverage found in BOPs vary from one policy and insurer to another, but many utilize a package policy format provided by the Insurance Services Office (ISO).
Most BOPs do not provide comprehensive coverage. A basic policy will cover your building/structure, the permanently installed fixtures, machinery or equipment and the building contents. But many forms of loss and systems are not covered under a basic policy and may require additional premiums or complementary services. For example, most property insurance policies do not include wear and tear because insurance is there to cover loss that is accidental and unpredictable.
Regular maintenance of your property is your responsibility. Similar to a homeowner’s insurance policy, if you suffer a system breakdown due to neglect or oversight on your part, then your business property insurance won’t cover the repair, recovery or replacement of those systems.
Until recently, there haven’t been commercial warranty services to cover the regular maintenance and repair of office systems, which is a well-known practice for homeowners. With the introduction of companies like OfficeGuardian in the Phoenix area, business owners now have a comprehensive service to maintain their systems and prevent the unnecessary wear and tear that can lead to breakdowns. Even when breakdowns occur, the office warranty plan provides coverage for those repairs as well.
For landlords and property managers, the gaps in insurance coverage can be costly not only in monetary terms, but in terms of tenant turnover. If you are renting an office space to a small business without an office warranty plan, then you also run the risk of system failure if proper maintenance isn’t happening on a regular basis.
The systems may operate just fine while your tenant is in residence, but if a failure happens when it’s time to turn the space over and bring in a new tenant then the price tag can be quite considerable. As a landlord, you want to be able to assure new tenants that systems have been maintained regularly and professionally, and should a breakdown occur you want to ensure a speedy response.
As you move forward with establishing your new business presence, it is important to understand which causes of loss and property are covered by your property insurance and what are the limitations. What your business insurance doesn’t cover can cost you. Be certain that you have a plan in place to address those areas not covered by your property insurance. A commercial office warranty through OfficeGuardian repairs properly maintained appliances and mechanical systems that break due to normal wear and tear.
OfficeGuardian offers a convenient commercial office warranty for Pro-Active Protection™ of Professional, Medical, Dental and Retail Business Suites and Office Condos.
For more information visit www.officewarranty.com.