Are you shopping for affordable Contractors Insurance or insurance services in California, regardless if your business operations is located in Anaheim Hills CA, or Orange County CA? If so, let’s examine a few items you will find on your commercial policy.
These items will help lay out what type of coverage options are available to you as a business owner or an independent contractor.
These items include the common policy declarations, and the coverage forms found on your contractors coverage or builders risk coverage policy.
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Understanding the policy structure and coverage options available on your contractors policy, will reduce any gaps in coverage or unnecessary premium charges for coverage options that our not in your niche market.
Commercial Property Coverage has many areas of coverage and guidelines, so lets begin there, the introduction to your commercial property policy!
Contractors Insurance – Commercial Property Policies
The initial documentation that you will received once you buy a contractors policy is the the Declarations Page. This is where you will find, the name insured, insurance coverage amounts and definitions of the “pronouns” used within the language of the article.
This is an important factor, since the tone of language found on your declarations page will be that of a conversational tone and not the formal tone normally found in legal documents.
After you have reviewed your Declarations Page for accuracy, you will find the Coverage Forms to your Property policy. Thirteen different Property Coverage forms exist within the CPP or Commercial Package Policy program.
Each one of these forms can be issued as a stand alone or be combined with an additional property form on a mono-line insurance policy, or lastly can be issued with other coverage as a part of a package commercial policy.
Here is a list of the Common Forms Available:
- Builders risk coverage form
- Business income coverage form with extra expense
- Business income coverage form without extra expense
- Extra expense coverage form
- Leasehold interest coverage form
- Legal liability coverage form
- Glass coverage form
- Condominium association coverage form
- Condominium commercial unit owners coverage form
- Mortgage holders error & omissions coverage form
- Tobacco sales warehouses coverage form
- The standard property form
- Building and personal property coverage form
Building and Personal Property Coverage Form
In this section we will examine Builders Risk Insurance and it’ coordinating coverage forms. The Builders Risk Coverage form, (CP 00 20) provides coverage for buildings or building alterations during the course of their construction, thus reason for the term, “Building Risk Insurance”.
It also includes other coverage’s such as foundation insurance, and coverage, if situated within 100 feet of the premises, any fixtures and machinery used to service the building and materials supplied and used in the course of the construction operation.
Temporary Structure Use
This coverage form will also cover for temporary structures built or assembled on the site, including scaffolding, cribbing and construction forms, as long as other insurance does not apply.
In addition to this coverage, your policy or Building Insurance policy recognizes the accumulation of value, which begins at zero and progresses to the completed value of the building being constructed.
The coinsurance requirement on a Builder’s Risk form is 100% of the completed value.
Several endorsements serve to modify the insurance coverage under this specific form, and are discussed in the following paragraphs.
Business Income Form
If it is necessary to suspend operations due to a direct physical loss caused by a covered loss under your contractors insurance, than your commercial insurance company will pay for the loss of the business income during a period of restoration.
Business Income Loss
Your policy will only pay for the loss of business income that occurs within a 12 consecutive month period after the date of the initial loss.
This additional coverage is not subject to the limits of insurance show in on the policy, so make sure to review all your Declarations Pages and documents to ensure no gaps exist within coverage.
Extra Expense Form
The next form is labeled an Extra Expense Form, and will pay extra expenses incurred during a period of restoration for the purpose of avoiding or minimizing a suspension of operations.
This coverage will also apply only during the 12 consecutive months following a direct loss, and is not subject to the limits of coverage.
Building and Personal Property Coverage Form
This form describes the varying types of property coverage that apply to your policy, and are established to meet the conditions for coverage as set by your company terms.
A separate set of Commercial Property Conditions must be attached with one or more Cause of Loss forms, which describe the perils insured against. The combination of these items completed is known as a Commercial Property Coverage Part.
Common Policy Conditions
The Common Policy Conditions which apply to all commercial coverage’s in the program and Common Policy Declarations, which summarize all the coverage’s included in the policy, must be attached together.
These items are used whether or not other coverage’s are actually included in the policy.
The standard property coverage form where you will find your contractors policy, is known as a direct damage form. It covers actual damage, directly resulting from a covered peril, to covered property.
Example of Condition
As an example, if a landlord’s building burns down, the destruction of the building is the direct loss and can be covered by this kind of coverage.
An example of an indirect loss to this story would be if the landlord also loss his rental income due to the fire. Loss of rents is an indirect loss and not covered by the standard from.
Purchasing coverage under the Building and Personal Property Coverage Form is not the only source of insuring personal property of others.
Legal Liability Coverage Form
Another ISO for, which is defined as the Legal Liability Coverage Form, will pay for damages to property of others while at your premises, but only if you are found to be legally liable.
The method of valuation is used on an actual cash value for these type of property coverage’s, unless the insured has activated the optional coverage for the replacement and paid an additional premium for this add-on coverage.
The coverage is activated by an entry or endorsement on the declaration page which indicates which coverage the insured would like to change for the loss settlement section known as replacement cost.
Actual cash value may be the only valuation method available for the property of others, which depends entirely on the insuring company.
Types of Coverage Forms
- Residential Construction Insurance & Builders Risk Insurance
- Residential Home builders with 1-100 home starts per year
- Single family and limited Multi-family builders
- Homeowner & Condo Owners Associations – Available
A wide range of Commercial Vehicle/Auto Classes from Cement Mixers, Sand & Gravel Hauling, Contractors, Delivery, and More.
General contractors engaged in specialty construction & remodeling of restaurants and retail chains or franchises Mixed residential & commercial construction
Commercial Condo Construction Coverage
- Commercial Apartment Construction
- All styles of apartments (amenities included)
- Up to 100 units per development
- As many as 5 stories
- Builders Risk and Umbrella Insurance available
- Clean Streets Program
- Paving Insurance
- Power Sweeping
- Line Striping
- Seal Coating
- Catch Basin Services
- Portable Sanitation Insurance
- Portable toilet rental, servicing and cleaning
- Septic Tank Cleaning and inspection
- Cesspool and sewage pit pumping and cleaning
- Sewer line cleaning and rodding
- Sewer and storm basin clean out
- Liquid Vacuuming operations
Establishments primarily engaged in providing landscape care and maintenance services and/or installing trees, shrubs, plants, lawns, or gardens Establishments.
These are primarily engaged in providing these services along with the design of landscape plans and/or the construction (i.e. installation) of walkways, retaining walls, decks, fences, ponds, and similar structures.
Limits to Policy
The last area to look at is the limits that are applicable to your policy. With property coverage, limits are applied on a per occurrence basis.
The applicable limit or limits of this type of coverage shown in the declarations is the most the carrier will pay out for all loss or damage resulting from any one occurrence.
Exhaustion of Coverage
Obviously, there is a limit to your coverage so, if you need coverage amounts above the limits you are currently carrying, check in with your agent or broker to find the best options to raise your limits.
You can look at purchasing an umbrella policy where excess coverage options are available. However, depending on your specific policy and industry, you may have a built-in option for raising your coverage limits.
Every coverage policy has different guidelines and options so, always make sure to check in with the one you are currently insured with. After you receive your premium amount with the current carrier, then you can shop that exact rate with the coverage’s you currently have.
For the major coverage of the building and personal property form, the most any insurance company will pay out for a loss or damage show in your declaration page.
One or more limits may be shown on your declaration page, which depends upon how the coverage was written.
Building and Personal Form
The building and personal property form may be written on a specific, schedule or blanket basis.
Specific coverage provides a specific amount of insurance for specific types of property at a specific location. As an example, a form providing coverage amounts of $200,000 for a building and $50,000 for personal property are at one location.
Schedule coverage may be used to provide insurance for different types of property at different locations. Various buildings and contents may be itemized on a schedule, and a specific amount of coverage will apply to each.
A few items may be scheduled on the declarations page, but when longer schedules are involved, the locations and amounts of coverage will be attached by endorsement to the policy.
A blanket coverage policy will provide coverage on a single amount of coverage that applied to all types of property at a single location, or to all types of property at multiple locations.
Blanket coverage may be written simply by showing the property entries on the declaration page.
Example of Coverage Limits
For example, showing a limit of one million for coverage’s A, B, and C would meant that the single limit applied per occurrence to combined losses under the three major coverage options.
Another example would be a single limit that applied to all coverage options at multiple locations.
This protection allows a retail or manufacturing operation with more than one location to move merchandise or stock between locations without having to adjust coverage limits at each location.
No Policy Gaps in Coverage
This is not only an easier method for the insured, but it prevents any gaps in coverage. If you have other items to think about as a business owner, you may not keep track of how your coverage will follow.
With this example, no matter what location you are operating at under the specific guidelines, you will be protected. This provides peace of mind and future security.
This is a good topic of discussion when discussing policy coverage’s. Under the property not covered section that you have in your declarations page have items listed.
These items that are listed are exclusion to coverage. This is why it is so important to examine these items very carefully.
Many people are so worried about the proper coverage at the best rate without realizing that some of their tasks conducted within their operations will not be covered.
You should read carefully over them, and if you have any questions, seek out a licensed commercial specialist who can walk you through the process. It truly is not that complicated, it just needs to be explained in simpler terms.
As you are aware, anything not covered, regardless of the type of property or a cause of loss in fact an exclusion from the policy.
Exclusionary language may actually be found in an insuring agreement, or a definition, or any policy provision where an exception or reference is made to something that is not covered.
But in property forms the formal term of exclusion has a traditional use, which is used to mean the cause of loss, or perils, which are not covered. Under the current commercial lines program, these exclusion are found in the loss forms that apply to the coverage.
Insurance Services Orange County CA
If you are shopping for cheaper Contractors Insurance of car insurance companies in California, regardless if you live in San Diego CA, or Riverside CA, we can help!
Target Up Insurance has specialized in all areas of Commercial Property Insurance, with an emphasis on general liability insurance for Contractors, Builders Risk Insurance, and Construction Insurance for over 30 Years!
Contact a Commercial Agent at 800-962-0085 for immediate assistance or if you need to find the cheapest commercial or personal insurance services.
Service Areas: Orange, Anaheim, Riverside, Victorville, Moreno Valley, Colton, Grand Terrace, Redlands, Fullerton, Yorba Linda, Pomona, Ontario, Fontana, Rialto, Costa Mesa, Huntington Beach and Anaheim Hills.