TWFG Commercial Business School Commercial 103

TWFG Commercial Business School – Commercial 103 Commercial Lines Basics: Commercial Property: Building

So what is covered under “Building”?

1) The Building

 First off is the building itself, as described on the declarations page.

2) Fixtures

 Also included are any fixtures, such as light fixtures, including outdoor fixtures.

3) Permanently installed equipment

 This is usually means something that is bolted to the ground or to the wall. In reality, the insured has the option to include such equipment in either the building or business personal property limit. Since the building coverage is often broader than the business personal property coverage, including permanently installed equipment under building can be very advantageous for some risks, such as a manufacturer who has a lot of equipment.

4) Some forms of Personal Property

 Also included is any personal property used to maintain or service the building, such as fire extinguishers, outdoor furniture, floor coverings, appliances to cool or heat the building, dishwashing and window washing equipment, lawn mowers, snow blowers, and floor cleaning equipment. Such a broad definition allows a landlord to purchase building coverage only, and have all building related personal property included without also having to purchase BPP coverage.

5) Additions, Alterations and Repairs

 Also falling under the building limit are additions under construction, alterations and repairs to the building. This removes the need to purchase separate builders risk coverage for these activities. However, it is important to note that the coverage limit may need to be increased TWFG Commercial Business School – Commercial 103 Commercial Lines Basics: Commercial Property: Building before undertaking additions and alterations, to ensure that an adequate amount of coverage is available. Included in this definition are all materials, supplies and equipment used for alterations, additions and repairs, as long as they are on the premises or within 100 feet of the premises*. However, in practice, most contractors will insure such items on an inland marine installation floater, so the Building coverage would be excess.

* 100ft of the premises means the premises boundary. Therefore supplies that are 20 feet beyond the property line but 300ft from the building are covered.

As you can see, there’s a lot more to Building coverage than just the building itself.