PROPERTY INSURANCE: designed to protect your company’s buildings, property, and contents. It protects against loss from perils including: fire, lightning, hail, windstorm, explosion (except when caused by boiler), civil commotion, riot, aircraft, vehicles, smoke, volcanic eruption, sprinkler system leakage, sinkhole collapse, vandalism, or malicious mischief. The above is referred to as basic insurance coverage and can be broadened to include other perils.
BUSINESS PERSONAL PROPERTY: traditionally known as “contents”, this term actually refers to furniture, fixtures, equipment, machinery, merchandise, materials, and all other personal property owned by the insured and used in the insured’s business.
COINSURANCE: clause that applies to building and personal property coverages. The coinsurance clause protects an insurance company when a property is underinsured. If a policy has a coinsurance clause, a coinsurance percentage will appear on the Declarations page of the policy. The insurance company uses this percentage in a formula to determine how much to pay for the property in the event of a loss. The insurance company will not pay the full amount of the loss if, at the time of loss, the value of the covered property times the coinsurance percentage exceeds the limit of insurance for the property.
BUSINESS INCOME INCLUDING EXTRA EXPENSE: net income (net profit or loss before income tax) that would be earned and continuing normal operating expenses (including payroll).
DEDUCTIBLE: the amount of loss which an insured must pay before the insurance company will pay its portion of the loss.