Common Commercial Property Insurance Exclusions

One of the core coverage types for any commercial business owner is commercial property insurance. It protects a company’s physical assets, such as an office building, its interior contents and exterior features like outdoor signage, from losses due to certain covered events. Some of the most common perils – fire and explosions, theft, vandalism, and some weather events – are included in commercial property insurance coverage.

While commercial property insurance covers many of the most prevalent threats to a business’s property, there are a lot of things that it excludes. Some of the most common commercial property exclusions can be the biggest threats to a business.

Floods and Earthquakes

Coverage for these two disasters is excluded in standard commercial property policies.  The only way to secure this coverage for either of these events is with a specialty commercial insurance policy. If a business is located in an area of high flood risk or an area prone to strong earthquakes, it will need a separate policy for each of these perils.

Acts of War

War and military action exclusion are considered too catastrophic to cover for commercial insurance writers. This includes damage caused by military missiles, even if the policy includes coverage for damage by aircraft.

Damage From the Insured’s Vehicle

Commercial property insurance does cover damage caused by physical contact with a vehicle or an object thrown from a vehicle, but this coverage excludes vehicles owned by the insured. Damage from those vehicles should be covered under a commercial auto policy or personal auto policy.

Certain Types of Weather.

Wind damage and hail damage are generally covered under a basic commercial insurance policy. However, damage caused by the weight of frost, snow, sleet, or any type of ice aside from hail are typically not covered.

Equipment Breakdown

Commercial property insurance protects a business’s equipment if it is damaged by a covered peril, but excludes damages caused by the equipment itself breaking or malfunctioning. Specific equipment breakdown insurance is necessary to cover the costs related to this peril.

Fungus and Pollution

This exclusion applies to loss or damage caused by the presence, growth, proliferation or spread of fungus, wet or dry rot or bacteria. Mold and mildew are usually included under the category of fungus. The exclusion also includes toxins, spores, scents or other by-products produced or released by fungi, which can be considered pollution. Other types of pollution like chemical or bacteria pollution is also excluded. Recovering from this type of contamination can be incredibly costly, which is why insurers began excluding it from standard policies. However, businesses owners can fill this gap in coverage by obtaining environmental insurance.

About AmSuisse

Formed in 2013, AmSuisse, Inc. has quickly distinguished itself as a wholesale operation that specializes in working very closely with our agents and broker partners to develop responsive, individualized service for each client. Our unparalleled writing support, industry-specific expertise, marketing support, responsive proposals and quotes, strong customer service, and strong relationships with our carrier partners have all helped us to provide the best possible coverage for our clients. To learn more about our available coverage, contact us today at (800) 485-0229 to speak with one of our representatives.