What Is Building and Personal Property Coverage Form?
Building and personal property coverage form is a type of commercial insurance policy designed to cover direct physical damage or loss to commercial property and its contents. This type of insurance defines specifically what property is covered—such as buildings and personal property, what property is not covered—such as cash and animals. The building and personal property coverage form will detail the losses covered, which may include fire and vandalism, but it will outline any additional coverages, exclusions and limitations, and insurance limits and deductibles.
Key Takeaways
- Building and personal property coverage form is an insurance that covers physical damage to commercial property.
- If the building in which a business operates is owned, the policy will likely cover both the building and its personal property, but if the building is rented, it may only cover the personal property.
- Policyholders should inspect their documents to make sure everything that should be covered is covered and purchase additional coverage if needed.
- Building coverage may insure items that are permanently attached to the building itself, while personal property coverage includes property that is not part of the building.
- Building and personal property coverage exclude land, water, plants, roadways, crops, shrubs, money, accounts, instruments, or trees.
Understanding Building and Personal Property Coverage Form
It is important for policyholders to inspect their coverages when they take out a building and personal property coverage form policy to make sure everything that should be covered is covered. If the policy is inadequate, it's usually possible to purchase additional coverage.
Building and personal property coverage form excludes claims for loss or damage to land, water, bridges, roadways, and underground pipes or drains. The policy also excludes any loss to plants, crops, trees and shrubs. It will also exclude losses for certain types of personal property, including deeds, instruments, money, accounts, bills, and securities. Vehicles, watercraft, and aircraft—unless specifically named as insured property—are also excluded.
Covered losses are considered items that are attached to a building, but loss due to wear and tear or dishonest employees aren’t considered to be covered. An insurer may offer additional coverage beyond the basic criteria.
If electronic data is lost in a fire, flood, or other covered events, this coverage will recover the loss that may otherwise impact a business. This does not include data lost due to mistakes, actions of an employee, or the business’s own liability that caused the loss. Electronic data is a special consideration and would require an extra payment in addition to the regular premium.
Businesses located in regions that experience seasonal changes may experience seasonal variations in the value of property or materials. For example, a boating shop may experience a total loss during its peak season of summer rather than slower, colder seasons.
Special Considerations
Coverages a policyholder should look for on a building and personal property coverage form depends on the nature of their needs and financial connections to the commercial property in question. Commercial property insurance policies cover two basic types of property—buildings (also called real property) and business personal property.
If someone owns the building in which their business operates, a commercial policy should cover both the building and the BPP it contains. If renting or leasing, the proper commercial property insurance policy will cover only BPP.
Building coverage normally includes machines and equipment that are permanently installed, such as a furnace, boiler, and air conditioning equipment. Fixtures, or property that is permanently attached to the building such as a built-in bookcase or cabinet, are also covered. Floor coverings, appliances (like refrigerators and dishwashers), fire extinguishers, and outdoor furniture are usually considered BPP.
BPP consists of owned property that is not part of a building and is not otherwise excluded. It includes office furniture, machines and equipment (if not attached to the building), raw materials, goods-in-process and finished goods. Improvements made to a leased building are covered if you paid for them and cannot be legally removed.
The limits of building and personal property form insurance apply separately to each occurrence, except for a small number of additional coverage specified in the policy. BPP coverage is not subject to an aggregate limit that caps a recoverable amount under that coverage during a policy year.
FAQs
Building and personal property coverage form is an insurance that covers physical damage to commercial property. If the building in which a business operates is owned, the policy will likely cover both the building and its personal property, but if the building is rented, it may only cover the personal property.
What is the meaning of personal property insurance? ›
What is personal property insurance? Personal property coverage — also known as contents coverage on a home policy — helps cover the cost of your personal items if they are destroyed, damaged, or stolen due to a covered loss or peril.
What is an example of personal property of others coverage? ›
And “business personal property of others” coverage insures property that may not belong to you but you're responsible for; for instance, if an out-of-state business partner brings a laptop to your building during their visit. Property insurance bundled with liability insurance is called a package policy.
What is the definition of personal property in the homeowners forms includes? ›
Personal property is the stuff you own — furniture, electronics and clothing, for example. Whether you own a home or rent an apartment, home insurance or renters insurance policies typically include personal property coverage.
What is building coverage? ›
Building coverage – The percentage of the lot area that is covered by building area, which includes the total horizontal area when viewed in plan. Impervious cover – Any structure, surface or improvement that reduces and/or prevents absorption of storm water into land.
Which of the following is not covered by personal property coverage? ›
Final answer: Coverage C, Personal Property, typically includes most personal items within the insured home, but does not cover vehicles, and high-value items may require additional coverage.
What's the best definition of personal property? ›
Personal property refers to movable items that people own, such as furniture, appliances, or electronics. Personal property can be intangible, like digital assets, or tangible, such as clothes or artwork.
What are 4 examples of personal properties? ›
Common examples include:
- Personal belongings such as clothing and jewelry.
- Household items such as furniture, some appliances, and artwork.
- Vehicles such as cars, trucks, and boats.
- Bank accounts and investments such as stocks, bonds, and insurance policies.
Intellectual property is one of the most common forms of intangible personal property. Some examples of intangible personal property include image, social, and reputational capital, as well as personal social media pages and other personal digital assets.
What are the three personal properties? ›
Personal properties are generally movable properties that do not have fixed positions. It can be moved from one location to the other; for example, vehicles, home appliances, and gold are belongings that can be easily moved to different locations.
The building and personal property coverage form will detail the losses covered, which may include fire and vandalism, but it will outline any additional coverages, exclusions and limitations, and insurance limits and deductibles.
What are the two categories of personal property? ›
Types of Personal Property
Tangible items (also known as a chattel) are physical items that can be seen and touched. Intangible items, like a business brand or a copyright, are not physical items that can be touched but which have a value to the owner. They can be sold by a person or business to another party.
What does coverage C personal property mean? ›
Coverage C - Personal Property
This coverage provides protection for the contents of your home and other personal belongings owned by you and other family members who live with you. Coverage is limited on certain types of property that are especially susceptible to loss, such as: • Jewelry. Antiques. Furs.
What are the two types of property coverage? ›
Understanding Property Insurance
- Replacement cost covers the cost of repairing or replacing property at the same or equal value. ...
- Actual cash value coverage pays the owner or renter the replacement cost minus depreciation.
Damage or destruction due to vandalism, fire and certain natural disasters are all usually covered. So is your liability if someone is injured on your property. Certain catastrophes, like flooding or earthquakes, are generally not covered by basic homeowners policies and require specialized insurance.
Which of the following would not be covered under a builder's risk coverage form? ›
A builders risk coverage form provides protection against losses on the building, equipment, and supplies, but not to accidents on the job, the land, scaffolding, and theft. The policy does not cover war, nuclear hazards, extreme weather, or government seizure.
What is the difference between personal liability and property? ›
The difference between personal liability and property liability is that property liability covers damage you cause to another person's property, such as in a car accident, while personal liability covers damage or injury to another person which you are legally liable for.
How does property insurance work? ›
Property insurance provides financial reimbursem*nt to the owner or renter of a structure and its contents in case of damage or theft—and to a person other than the owner or renter if that person is injured on the property.
What is the meaning of personal belongings insurance? ›
Cover of your contents while outside the home. Extend your contents insurance to outside of your home. With up to 90 days cover anywhere in the world your items are protected wherever you are. Add to your policyNew and existing claims.
What does personal mean on insurance? ›
Personal lines insurance refers to any kind of insurance that covers individuals against loss that results from death, injury, or loss of property. These insurance lines generally protect people and their families from losses they couldn't afford to cover on their own.
