The value of a policy isn't defined by the brochure, but by its limits: what it covers, under what conditions, and what falls outside it. This article draws the coverage map of commercial property insurance – honestly, exclusions included.
- The backbone of the basic cover: fire, explosion, storm, hail, water damage from pipes, burglary, malicious damage.
- It can be extended with add-ons: glass breakage, machinery breakdown, electronic equipment, and others.
- Exclusions aren't small-print tricks – they're the boundaries of the product. You need to know them; at claim time it's too late.
The basic cover: the classic risks
The backbone of the basic cover is typically the fire-and-natural-hazard group (fire, explosion, lightning strike, storm, hail, cloudburst, water damage from pipes); burglary, robbery and malicious damage are a separate module in most products – with their own limits and security requirements. That's no accident: the vast majority of losses on business premises come from this group. The Knowledge Base's Types of loss chapter gives a deeper, article-by-article look at each risk type.
The add-ons: where your activity decides
Machinery breakdown and electronic equipment insurance are typically separate modules – not to be annoying, but because they price a completely different risk: not fire, but breakdown, power surges, operator error. For anyone whose operation runs on machinery, this group is at least as important as the base cover – see the articles on machinery breakdown and electronic equipment.
Glass breakage, cover for equipment away from the premises, and cash cover are worth considering in the same way – separate Knowledge Base articles cover each of these.
What property insurance doesn't cover
There are typical exclusions: damage arising from neglected maintenance, gradually developing damage (corrosion, months of water ingress), and the war group; for intentional or grossly negligent damage, the insurer is typically relieved of its obligation to pay. And there are grey areas that belong to a different product: damage caused to others is a matter for liability insurance, risk during construction is a matter for construction all-risks insurance, and registered, road-going vehicles requiring official plates typically fall under fleet cover – work machinery and forklifts used on the premises, though, often belong under the property and machinery breakdown group instead. For the full picture: the exclusion map.
Flood and groundwater are another important boundary: insurers word these differently and cautiously – an honest look at this in the article on flood and inland inundation.
How do you turn this into a good decision?
The order: first the premises' actual risks, then the scope of cover, and finally the premium. When comparing offers, we line up not the headline features but the definitions and exclusions – that's the essence of the comparison. The decision is always yours.
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