Commercial Property and Liability Insurance
Commercial property coverage begins with the building, business personal property, and personal property of others, plus business income/extra expense to replace lost earnings and continuing costs during restoration. Cause-of-loss forms escalate from basic (named perils) to broad (expanded named perils) to special (open peril, subject to exclusions). Replacement cost pays without depreciation but requires a coinsurance percentage (commonly 80-100%) applied to value at time of loss; actual cash value deducts depreciation.
Coinsurance worked example
Building value at loss $1,000,000; 80% coinsurance; carried limit $600,000; loss $200,000; $5,000 deductible. Required limit = $800,000. Payment = (600,000 ÷ 800,000) x $200,000 = $150,000, less $5,000 = $145,000.
Liability
On an occurrence form, the injury must happen during the policy period, whenever the claim is filed. On a claims-made form, the claim must first be made during the period, subject to a retroactive date and extended reporting periods. CGL coverage parts: premises/operations, products-completed operations, personal and advertising injury, medical payments, supplementary payments. A general aggregate and a separate products-completed operations aggregate cap total payments; each occurrence is separately limited. Umbrellas sit above required underlying limits and can drop down; excess policies generally follow form.
Other lines: commercial auto, workers' compensation, inland marine, builders risk, professional/E&O, D&O, EPLI.
Traps
Using a liability limit to pay an employee's injury (workers' comp); confusing products-completed operations with contractual liability; assuming an umbrella is broader in scope rather than higher in limit.