Property Damage and Coverage Explained

Property Damage & Coverage Explained | Property & Casualty

Commercial property can be your business’ largest asset. If self-insurance is not an option, protect your investment from disasters, such as fire, wind, theft, hail and more, with property insurance. A thorough policy that includes a complete business inventory will ensure adequate coverage to continue operations in the event of a covered loss.

Types of Property You May Need to Insure

  • Buildings/structures (leased or owned)
  • Furniture, equipment & supplies
  • Inventory
  • Financial (e.g., money, securities, accounts receivable, payroll)
  • Valued documents & paperwork
  • Property in transit
  • Cargo
  • Outdoor property (unattached to building)
  • Intangible assets
  • Intellectual property

Common Property Damage Claims

Fire & Smoke

Regardless of the size of damage, fire claims are challenging as they include concealed damages, including mold and water, that may influence future complications.

Flood, Mold & Water

Commercial property water damage is a common and costly claim for businesses. Most flood and water losses derive from plumbing, appliances and HVAC systems. Additionally, mold growth from water damage can cause health risks. Often times these claims are closed before a threat is even identified.

Wind, Storm & Hail Damage

Strong winds and hail can cause significant damage quickly to a business’ property. Storm damage can be extensive to document. A source-of-damage assessment and repair estimation can become costly and disrupt operations.


High wind (over 35 mph) damages can develop from hurricanes, tropical depressions, tropical storms and tornados. Multifaceted windstorm policies can be daunting to understand without expertise. While these storms are unavoidable, you can take critical measures to protect your business. Create a disaster plan and collaborate with a risk advisor who will understand your exposure and provide recommendations to minimize your risks.

Theft & Vandalism

These claims are common for commercial property owners. Additionally, the rise in civil unrest has increased theft and vandalism as an unfortunate side effect. Your risk advisor can provide recommendations to minimize the risk of theft and vandalism, including installation of surveillance and security devices, suitable lighting and ample locks.


Sinkholes occur when a landform (e.g., soil, sediment, rock) as underlying strata is dissolved by groundwater. A sinkhole may form by a collapse into subterranean voids created by the dissolution. Sinkhole loss is recognized when the building’s structural damage is caused by the sinkhole activity. Many areas of the country are subjected to sinkholes, which can appear without warning.


A building collapse occurs when there is a failure in the structural integrity of your building. It can be triggered by multiple factors including rain, snow or ice weight on rooftops, structural complications, earthquakes, and termites.

Business Interruption

As many organizations discovered during the pandemic, business interruption claims are difficult to adjust. They require an estimation of a business’s lost earnings and expenses due to the loss. In most business interruption policies, coverage is only triggered for physical property damage.

Loss of Use & Business Income

Coverage for both income and inventory ensures your business receives revenue equal to what it would have received if the loss had not occurred. Estimations must be made to include projected sales, cost of goods sold, value, expenses and interruption period.

Data Loss or Electronic Data

Electronic data losses can be catastrophic and halt all operations. A fire or natural disaster that destroys your computer systems would justify a claim to restore your business’ livelihood. While your standard property policy compensates the replacement of your hardware, a data loss policy would cover the cost to replace the lost stored data.

Business Personal Property

A claim for recovery may include assets such as furniture, supplies, equipment or inventory. Business personal property recognizes movable contents owned by your business.

Additional Commercial Property Insurance Claims

  • Drywall destruction
  • Floor & tile damage
  • Septic & sewer back-ups
  • Pipe breaks & leaks
  • Foundation cracks & failures
  • Aircraft or vehicle crashing into building

A typical policy will provide for your building’s replacement cost value and property’s actual cash value. Replacement cost value is the amount necessary to replace/rebuild your building or repair damages with similar material (without depreciation). Actual cash value is the value of your property when it is damaged or destroyed. This amount is typically determined by subtracting the depreciation from the replacement cost value.

Most property insurance policies include a coinsurance clause, which requires the policyholder to share the cost of covered services up to a moderate percentage of the property’s actual cash value. This will allow you to receive full coverage for your losses. Some inadequate property coverages may obligate you to pay a percentage of all losses even if they’re listed in the policy.

We’re Here to Help

CBIZ understands that determining your business’s value is critical. Connect with a member of our team to learn more about our property insurance and loss control solutions to protect your business.

Property Damage & Coverage Explained | Property & Casualty property can be your business’ largest asset. If self-insurance is not an option, protect your investment from disasters, such as fire, wind, theft, hail and more, with property insurance.2021-08-19T16:00:00-05:00Commercial property can be your business’ largest asset. If self-insurance is not an option, protect your investment from disasters,such as fire, wind, theft, hail and more, with property insuranceRisk MitigationAuto DealersHospitality & EntertainmentManufacturing & DistributionRestaurantsRetailProperty & Casualty InsuranceYes