Commercial property

Account for what it takes to restart the floor.

Review the premises, production equipment and stock together. The building address alone does not describe the value inside it.

Commercial property insurance addresses covered physical damage to insured property. For a production business, the review starts with what is owned, what is leased and what would have to be replaced before work could resume.

Separate the building from the business contents

A tenant may own improvements, fixtures, machinery and inventory without owning the building. Prepare those values separately and compare the lease obligations with the interests described in the policy.

  • Tenant improvements and who must repair them
  • Owned machinery, leased equipment and customer property
  • Raw materials, work in progress and finished stock

Use replacement values that reflect the equipment

A used machine’s purchase price may be different from the cost of replacing its function. Note specialist tooling and installation needs, then ask how the proposed valuation terms would treat each item.

  • Replacement cost or actual cash value wording
  • Reported values and any coinsurance requirement
  • Peak stock values before a shipment leaves

Distinguish damage from the interruption it causes

Physical repairs and lost production income are separate subjects. Review business income and extra expense terms alongside property coverage, including the event that must occur before those terms can respond.

  • Equipment breakdown needs separate attention
  • Flood and earthquake require explicit review
  • Outside storage and property at other locations need to be identified

When the bottleneck is a single machine

A shop relies on one press for a particular part. The useful insurance conversation includes the press value, how it could be damaged, the time needed to replace it and the cost of temporary production elsewhere. No single equipment value answers all of those questions.

These are review topics, not a statement that a particular loss is covered. Policy wording, scheduled property, limits, deductibles and exclusions determine the response.

Reference for coverage terminology: California Department of Insurance commercial insurance guide.

All coverage topics

Put the next production change on the agenda.

A new machine, outside storage or a first customer installation can change the insurance discussion. Procurement services are performed by Spot and its brokerage partners; Potrero Risk does not itself transact insurance.

Discuss your operation