Commercial Property

Commercial Property Insurance

This form of insurance is intended to cover unforeseen occurrences that result in:

1. Loss or damage to tangible property that you either own or are responsible for insuring.

The policy covers property described in the declaration page and includes:

  • Buildings, equipment and stock
  • Valuable papers
  • Miscellaneous Floaters

2. The consequences of loss or damage to tangible property

  • Business interruption
  • Extra Expense
  • Accounts Receivable

Top of page

Insurance Definitions

For definitions of various forms of insurance refer to Insurance Marketplace

  • Difference in Conditions Insurance

Top of page

Accounts Receivable

Any business that allows credit to its customers must maintain an accurate and up-to-date record of all the amounts owed to it. This record may be in a traditional form of manually prepared account books or may be stored on computers. The methods of recording the information may vary, but once details of a debt are recorded, the amount can be recovered at some future date.

Since account books and computer records can be destroyed, you may sustain a financial loss as a result. Some customers will settle their debts without being reminded but others will wait for the bill and, if no bill is received, will not pay at all.

Immediately after their destruction, it may be possible to reconstitute the records by utilizing the knowledge of the staff or perhaps using old accounts, but the new records will have to be created quickly to be of any value.

Even if fresh accounts are prepared, it is likely that a number of the debts will be lost because accurate details are not known.

A material damage policy will pay for the cost of the paper on which the records are prepared and for the labor costs involved but it will not pay for the cost of finding out the information. More importantly, it will not pay for the loss to the business if the information cannot be recovered and outstanding debts are not paid.

Under the normal Business Interruption policy, only a shortfall in the future earnings of the business, after a loss occurs, will be paid. No payments will be made in respect of debts, which cannot be recovered. This creates a gap in the cover, which the accounts receivable (“Book Debts”) policy is designed to fill. This can be arranged to cover loss from the same perils as those available under a Business Interruption policy, including theft and “all risks”, and operates as follows:

If your records of debts are damaged or destroyed by an insured peril, after the accounts have been reconstructed as far as possible and all the known outstanding debts recovered, the shortfall between the amount actually received and the amount the business should have received will be made good by the policy.

This sum insured should approximate the largest actual amount owed to it at the end of any month in the past year. The premium is based on an initial estimate of the maximum amount outstanding at any one time. With large policies the cost is usually thrown in free since there are usually adequate safeguards in terms of regular off-site back-up procedures.

Top of page

Extra Expense

Coverage for necessary additional expenses of continuing business operations after damage to insured premises from a covered cause of loss.

Top of page

Extra Expense Worksheet

First                Second            Third **
Month            Month             Month

a. Rental of temporary premises
b. Rental of temporary equipment
c. Net cost of equipment purchased *
d. Expense of moving equipment, etc.
e. Cost of cleaning temporary premises
f. Light, power, heat at temporary location
g. Telephone and telegraph installation and perators at temporary location
h. Extra telephone and telegraph charges
i. Special announcements in newspapers, etc.

j. Police protection or watchman service
k. Cost of engineering service
l. Extra cost of engineering service
m. Rental and use of cars
n. Special bonuses and overtime to employees
o. Expenses of making arrangements to have supplies and raw materials delivered to another location
p. Differentials in freight rates a/c different shipping points
q. Total extra expense
r. Deduct expenses discontinued at original location because of loss
s. Net extra expense

* To determine the amount under c, deduct salvage value of such property sold or utilized by the Insured upon resumption of operations at the original or other permanent location.

** Add additional months if necessary.

Top of page

Valuable papers and records

insurance An inland marine policy covering property such as blueprints, manuscripts, maps, historical documents, and business records on an all-risk basis.

Top of page


Floaters These are issued to cover movable property wherever it may be located. Coverage is usually for “All Risks” and has a low deductible.

Examples of some floater policies are:

  • bicycle floater,
  • camera floater,
  • contractors’ equipment floater,
  • equipment dealers floater,
  • equipment floater,
  • fine arts floater,
  • fur floater,
  • installation floater,
  • jewelry floater,
  • livestock floater,
  • pattern and die floater,
  • personal articles floater,
  • personal property floater,
  • physicians’ and surgeons’
  • equipment floater,
  • salesperson’s samples floater,
  • unscheduled property floater,
  • wedding presents floater

Top of page

Insurance Sources

(General – Not necessarily accessible by TCIM)

Contact us for assistance