PROPERTY & CASUALTY
Insured to Rebuild, Not to Guess
The difference between a manageable loss and a financial crisis is rarely the peril; it's the coverage that was or wasn't in place before it happened. At Crump Management Group, commercial property and casualty programs are structured from a thorough review of your actual exposures, not assembled from a quote request.
Property Coverage Is About More
Than the Limit
The amount of insurance shown on a property policy is only part of the equation. Deductibles, valuation provisions, endorsements, and policy conditions can materially change how much coverage is actually available after a loss.
Wind & Hail Deductibles
Wind and hail deductibles are often expressed as a percentage rather than a flat dollar amount. Depending on how the policy is written, that percentage can translate into a significant out-of-pocket expense after a storm.
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Understanding how the deductible applies and what dollar amount it represents is an important part of evaluating the program.
Roof Valuation
Not every property policy settles roof damage on the same basis. Depending on the policy, roof age, construction, and underwriting terms may affect whether a damaged roof is valued at replacement cost or actual cash value.
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Roof-specific endorsements and limitations should be understood before a loss occurs, particularly in areas with significant wind and hail exposure.
Coinsurance & Insurance to Value
Property limits should reflect the appropriate valuation basis for the assets being insured. Market value, tax value, and replacement cost are not the same thing.
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When a policy contains a coinsurance provision, carrying an inadequate limit can also affect the amount recovered after a covered loss, including some partial losses. Understanding both the property value and the policy's valuation requirements is critical when establishing limits.
What Your P&C Program Should
Actually Cover
Property & Casualty is not a single policy. It is a group of coverages designed around the property, operations, people, and financial exposures of the insured. The components will vary by client, but may include:
Commercial Property
Coverage for buildings, structures, common property, equipment, and other physical assets for which the insured is responsible. The property, limits, and valuation basis should reflect what is actually being insured and the financial risk associated with a loss.
Business Income & Rental Value
Coverage for lost income and certain continuing expenses when a covered loss interrupts operations or prevents a property from generating revenue. For rental properties, this may include lost rental income during the period of restoration.
General Liability
Coverage for certain third-party bodily injury, property damage, and personal and advertising injury claims arising from the insured's premises or operations. Limits, exclusions, and endorsements can materially affect how the policy responds.
Umbrella & Excess Liability
Additional liability limits above designated underlying policies when a claim exceeds the limits available under those policies. The appropriate limit depends on the underlying exposures and the protection being sought.
Equipment Breakdown
Coverage for certain accidental mechanical, electrical, and pressure-system breakdowns that may not be covered by a standard property policy. It can address damage to covered equipment as well as related business income and other resulting losses, depending on the policy.
Business Auto
Liability and physical damage coverage for vehicles owned or used in business operations, with additional options available for hired and non-owned auto exposures.
Crime & Fidelity
Coverage for certain losses involving theft, fraud, or dishonest acts involving an organization's money or property. Depending on the policy, coverage may include employee theft, forgery or alteration, computer fraud, funds transfer fraud, and other forms of financial loss. Coverage should reflect how funds are handled, who has access to them, and where the potential for financial loss exists.
Workers Compensation
Coverage for work-related employee injuries and illnesses, together with employers liability coverage for certain claims involving employee bodily injury that may fall outside the workers' compensation benefits provided by the policy.
Flood
Standard commercial property policies typically exclude flood. Separate flood coverage may be available through the National Flood Insurance Program or private markets and should be evaluated based on the property's location and exposure, not flood-zone designation alone.
Frequently Asked Questions
Commercial property insurance can cover buildings, structures, equipment, contents, and other insured property against covered causes of loss. The protection provided depends on the policy form, covered property, causes of loss, exclusions, deductibles, endorsements, limits, and valuation provisions.
Coinsurance provisions generally require property to be insured to a specified percentage of its value. If the amount of insurance does not satisfy the policy's coinsurance requirement at the time of loss, the claim payment may be reduced. The specific calculation and requirements depend on the policy.
Commercial general liability insurance generally provides coverage for certain third-party bodily injury, property damage, and personal and advertising injury claims arising from the insured's premises or operations.
The appropriate property limit depends on the property being insured, the valuation basis required by the policy, and other applicable insurance requirements. Market value, purchase price, tax assessment, and replacement cost can be very different numbers. Replacement cost estimates, appraisals, construction information, property characteristics, improvements, and policy provisions may all be relevant when establishing property limits.
Property damage coverage alone does not necessarily replace rental income lost after a covered loss. Rental value or business income coverage can provide protection for qualifying income losses during the applicable period of restoration.
General liability provides primary coverage for covered liability claims. Umbrella or excess liability can provide additional limits above specified underlying policies after those underlying limits are exhausted. Which policies sit beneath the umbrella or excess coverage and whether its terms follow or differ from the underlying coverage should be reviewed as part of the program.
Commercial property policies may apply a separate deductible to wind or hail losses. These deductibles are often percentage-based, and the way the percentage is applied depends on the policy language. Understanding both the percentage and its potential dollar impact is important when comparing property programs.
Standard commercial property policies typically exclude flood. Separate flood insurance may be available through the National Flood Insurance Program or private insurance markets. Flood exposure should be considered even when a property is not located in a high-risk FEMA flood zone.