In Part 1, we talked about three coverages that Anna should consider for the office building that she owns:  (1) Equipment Breakdown Coverage; (2) Business Income & Extra Expense Coverage; and (3) Outdoor Sign Coverage.  If you haven’t read the first part of this blog series yet, we recommend doing that before continuing.  (Going Beyond “Standard” Coverage Options for Lessor’s Risk Insurance - Part 1)

In Part 2, we will discuss some additional endorsements that your client, Anna, should consider:

1. Exterior Building Glass – This is one that is easy to overlook if you haven’t insured any large property exposures before.  Anna’s building has a full glass exterior.  The standard, unendorsed property policy provides coverage of $100 per pane limited to $500 per loss.  Whoa!  This would leave her completely underinsured.  By simply adding the Property Enhancement Endorsement to the policy, the glass is covered as part of the building.

    

   Example:  A windstorm comes through causing $50,000 of damage to the building glass.  You were smart enough to add glass coverage so Anna is properly insured instead of only having $500 of coverage.

    

2. Medical Payments – Increased Limits – One of the most common liability exposures that Anna needs to be concerned about is that of slips and falls. Medical payments coverage provides “no fault” coverage for these accidents, meaning legal liability is not required for the policy to pay. The ability to quickly make payments on these types of claims (since legal liability does not have to be proven) protects the relationship between the injured party and the business he or she was visiting, as well as the relationship between the property owner and tenant.  The unendorsed liability policy provides $5,000 of “med pay” coverage, and this can easily be endorsed to higher limits. By adding the General Liability Enhancement Endorsement, the limit can go up to $10,000.

    

   Example:  An 8-year-old boy comes to Anna’s building for a dentist appointment.  As he enters the building, he trips on a rug which causes him to fall and break his jaw. A couple months of drinking out of a straw isn’t cheap, so by endorsing the policy for additional coverage and being able to quickly pay out as much as $10,000, a long and expensive legal battle can be avoided.

    

3. Debris Removal – Debris is left behind on nearly every property loss and can be very expensive to remove. Many unendorsed property insurance policies provide debris removal coverage of 25% of the building; however, that coverage amount is subject to the building coverage limit. (i.e., The coverage amount available for debris is NOT in addition to the building coverage.  It is within that coverage amount.)  Therefore, endorsing the policy for an additional amount of coverage specific to debris removal is extremely important, especially in the case of a total loss claim.

    

   Example:  So let’s go back to Anna’s original concern when she first called you—a building fire—and now it’s happened.  Anna’s building is properly insured for 1 million dollars.  The fire is a total loss, so Anna is fully covered, right?  Well, maybe not.  We have to analyze the potential debris removal expenses.  In this case, it will take the full $1 million to rebuild; however, it has been determined that debris removal expenses will be an additional $50,000, so Anna is now out of pocket for $50,000 and she is not very happy with you.  By doing some simple research on average debris removal expenses in your area, you can endorse the policy for this additional coverage and keep everyone happy.

    

Tailored Protection

When some property owners buy insurance, they just want basic coverage.  However, insurance should be highly personalized—like in Anna’s case.  You will want to ensure that your clients are completely protected from any unique risks they might face.  Contact Pekin Insurance to learn more about Commercial Insurance for building owners and additional coverages and enhancements that may benefit your clients. To make your life easier, we have designed two package endorsements (Commercial Property Coverage Extension Endorsement and Commercial General Liability Enhancement Endorsement) which provide many of the coverages your clients need for one affordable price.

Does one of your Commercial Accounts have a specialty coverage that saved the day? Tell us about it in the comments below!

Note: The writings of Pekin Insurance are intended to be used for educational purposes only as well as to give you general information and an understanding of insurance. Pekin Insurance is not held to the accuracy or completeness of any information on this site or that is found by following any link on this site. Please refer to the policy, the specific coverage forms, and the endorsements for a detailed description of the coverages, limitations, and exclusions that apply. Each coverage scenario and policy are unique, so examples written by Pekin Insurance are not guaranteed.