Mortgage Loan Center

As a rule, the most cost effective and efficient way to provide property and liability insurance for your small real estate business is with a Businessowners Policy (BOP) specifically tailored to the type of real estate you sell. These policies will typically have provisions similar to the property insurance and liability insurance sections of the BOP. If you don’t find coverage in a package policy, you can buy property and liability insurance separately.

Property insurance
The policy covers the structures described in the policy. Accurate descriptions of the properties, as well as inventories of furnishings and equipment, are important to having the coverage you expect and avoiding any ambiguity if you have a claim.

Most policies include coverage for fixtures, machinery and equipment owned by the building owner, attached to a described building and permanently installed. Coverage for some similar items not permanently installed can be added by endorsement. Coverage may also extend to outdoor fixtures and include property, like lawnmowers and snow blowers, which are used to service the premises.

There are many types of coverage that can be added to the basic property insurance, including these common ones:

Ordinance or Law: If a building is damaged by a covered cause of loss, this insurance pays for costs caused by the enforcement of any ordinance or law requiring demolition of the undamaged portion or for the increased cost of construction to rebuild with mandated construction materials.

Debris Removal: This coverage increases the basic limit of insurance (often $5,000) to cover the cost for debris removal necessitated by loss to a covered property.

Outdoor Trees, Shrubs, Plants: This covers the cost to replace landscaping plants lost as the result of a covered cause of loss.

Glass Breakage: This insurance covers the cost to replace plate and other glass, including cost of supporting bars or frames and cost of lettering and ornamentation.

Signs Coverage: This coverage insures electrical signs against many accidental causes of loss.

Boiler and Machinery Insurance: This coverage pays for loss or damage resulting from accidents to pressure and refrigeration equipment, including boilers, air conditioning and refrigerating equipment; mechanical objects; electrical objects; and turbine objects.

Depending on the location of the insured property, it may be wise to add coverage for earthquake and/or flood, especially if the area you live in is zoned as such.