Broker reference
Commercial property insurance coverage: forms, limits and endorsements
Coverage is assembled from a form choice, a set of limits, a valuation basis and a stack of endorsements. Getting all four onto the submission the first time is the difference between a quote and a week of underwriter emails.
The coverage parts you are actually quoting
| Coverage part | What it covers | Submission note |
|---|---|---|
| Building | The structure, permanently installed fixtures and equipment, and outdoor fixtures. Limit is set per location on the statement of values. | State the valuation basis and coinsurance percentage alongside the limit. |
| Business personal property | Contents owned by the insured: furniture, machinery, stock, tenant improvements and betterments. | Tenant improvements are routinely missed on tenant-occupied accounts. |
| Personal property of others | Property in the insured's care, custody or control, covered up to a separate limit. | Flag bailee exposures — carriers often want them written separately. |
| Business income and extra expense | Lost net income plus continuing expenses during the period of restoration, and the additional cost of operating elsewhere. | Scope the period of restoration realistically; 12 months is an assumption, not a fact. |
| Ordinance or law | Coverage A for the undamaged portion, B for demolition cost, C for increased cost of construction to meet current code. | Essential on older buildings; ask before the underwriter does. |
| Equipment breakdown | Sudden mechanical or electrical failure of boilers, HVAC, refrigeration and production equipment. | Frequently added by endorsement rather than a separate policy. |
Terms vary by carrier form and state. Always read the policy language actually quoted — this is a submission reference, not coverage advice.
What the underwriter needs on the coverage side
- Coverage form requested (basic / broad / special) and any manuscript wording
- Building and BPP limits per location, with valuation basis and coinsurance
- Business income limit, waiting period and period of restoration
- Requested deductibles, including any percentage wind or hail deductible
- Endorsements requested: ordinance or law, equipment breakdown, spoilage, backup of sewer
- Protective safeguards in place and any warranty the carrier would attach
All of it lands on the ACORD 125 and 140 pair. PolicyFast AI assembles the address-derived half automatically so you only fill in what the insured has to tell you.
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Coverage questions
What is the difference between basic, broad and special form?
Basic form lists a short set of named perils. Broad form adds perils such as water damage, falling objects and weight of ice and snow. Special form covers direct physical loss except what the policy excludes, which shifts the burden of proof to the carrier — it is the default request on most commercial property submissions.
What is coinsurance and why does it matter?
Coinsurance is an agreement to insure to a stated percentage of value, commonly 80, 90 or 100 percent. Insure below it and a partial loss is paid at a reduced proportion. Agreed value suspends the clause when the carrier accepts a signed statement of values.
Replacement cost or actual cash value?
Replacement cost pays to rebuild with like kind and quality without deduction for depreciation; actual cash value deducts depreciation. The basis has to be stated in the submission, because it changes both the rate and the claim outcome.
Which endorsements should be addressed up front?
Ordinance or law, equipment breakdown, business income and extra expense, spoilage, sewer and drain backup, and any protective safeguards warranty. Raising them in the submission avoids the second round of underwriter questions.