What’s Included in Commercial Property and Casualty Insurance and When to Unbundle Coverage

Commercial property and casualty insurance is a type of insurance that protects businesses from various losses. A business may be required to get one or more policies based on laws and regulations in the area. Here’s what you need to know about commercial property and casualty insurance. 

Understanding Commercial Property and Casualty Insurance

You can break down commercial property and casualty insurance into two main categories. 

What is Commercial Property Insurance?

Commercial property insurance is an insurance type offered by insurance companies that protects various types of business property. This coverage may include building coverage, business property coverage, and more. When you think of commercial property insurance, you think of covering the things you lease and own. 

What is Commercial Casualty Insurance?

Commercial casualty insurance takes the role of having an insurance company cover the liabilities of a business. There are different liabilities that a business may face, including slip and fall accidents, slander, employee injuries, and more. 

Key Differences Between Property and Casualty Insurance

The type of coverage is the key difference between property and casualty insurance. Property insurance covers things you own or lease. Casualty insurance covers potential injuries or third-party damage to property. 

Key Components of Commercial Property Insurance

Let’s look at the key components of commercial insurance:

• Building coverage: Whether you own or lease a property, you want to protect the structure from losses that would lead to business interruption or closure. 
• Business personal property coverage: All the stuff your business owns, including furniture, computers, tools, and inventory, is covered by personal property coverage. 
• Business income coverage: This protects the business from interruption due to a covered loss and pays what the business would earn during the loss period. 
• Equipment breakdown coverage: When major equipment breaks down, this coverage pays to repair the equipment and allows business income coverage to kick in. 
• Extra expense coverage: This pays for extra expenses such as renting a new location for the period of the covered loss. Any extra expenses that you incur during the loss to stay operational are covered. 

Key Components of Commercial Casualty Insurance

Business casualty insurance can be any number of types of insurance policies that include: 

• General liability insurance: Covers third-party losses that occur because your business is operational. This may be injuries from a slip and fall accident or property damage due to operations. 
• Workers’ compensation insurance: This protects the business and pays for medical expenses and wages for employees hurt while working. 
• Commercial auto insurance: Takes on the liabilities that occur when driving company vehicles. This may also include coverage for the vehicle itself. 
• Professional liability insurance: Takes on the liabilities that occur from the business’s professional duties.
• Product liability insurance: Pays for liabilities that occur from consumers using the products your company develops. 

When to Consider Unbundling Coverage

There are times when you will want to or be required to unbundle policies. 

Understanding the Concept of Unbundling

Insurance companies write specific policies to cover specific risks. There may be some policies that you aren’t able to get underwritten into one simple policy or combined with other policies. For example, workers’ compensation is often underwritten as a standalone police while a business owners policy may have general liaibility and commercial property coverage bundled into one policy. Talk to your insurance agent about the best fit for your company. 

Benefits of Unbundling Coverage

Here are three benefits of unbundling policies:

1. Customized coverage options: When you don’t bundle you can pick policies that directly cover your business needs. 
2. Potential cost savings: While bundling often saves money if you need all the coverage, you can save money by not getting certain coverages when you don’t bundle. 
3. Enhanced flexibility and control: When you don’t bundle, you can pick and choose the policies that you need and customize them with endorsements as needed. 

Situations Favoring Bundled Policies

There are times when bundling policies makes the most sense:

• Comprehensive coverage needs: You can get a policy that can cover just about everything your company needs in one tidy policy. 
• Simplicity and convenience: It’s easier to keep track of one policy than it is to track multiple ones. 
• Cost considerations: If you need the coverage and can get it bundled, this is often the most cost-effective way to buy insurance. 

Evaluating Your Insurance Needs

Every business needs to evaluate its insurance needs. 

Risk Assessment and Analysis

Understand what your risks are and analyze what policies are required to cover those risks. Remember that you may need more than one policy to cover things, and that workers’ compensation is often a stand-alone policy. 

Consultation with Insurance Professionals

Work with insurance professionals to ensure you are covered for the risks that directly pertain to you. A professional can help you assess things and make wise decisions based on what policies do cover and what is excluded. 

Comparing Different Insurance Providers

Look at different policies and see what exclusions apply. Try to compare similar policies to see which insurance company can offer the best prices for the coverage.