By law, you are required to purchase several types of insurance coverage. For your protection, you are also encouraged to purchase a few others. Insurance is a two way street, especially for business owners when the climate is litigious. Among the policies you have to procure is Commercial Property Insurance Birmingham AL. It has several purposes including protecting buildings, property itself and loss of income. It is available in three forms ranging from basic to comprehensive. When you purchase your policy, you are expected to purchase enough for the entire value of the property.
Here are three ways a commercial property is valued for insurance purposes.
Replacement Cost
In many ways, insurance is seen as an additional expense you could do without. If you never end up filing a claim, you could be right. The issue with insurance is that it is a crap throw. You do not know if something could go horribly wrong that causes you a severe financial loss. If you are that victim, your policy covers you. For business purposes, it is always a good idea to play it safe. You are encouraged to purchase a policy that covers the entire replacement cost also known as special form.
Actual Cash Value
You can also opt for the actual cash value of the property. This is the replacement cost minus depreciation. The value to insure is very low, but the agent you work with will advise of the potential risks. If you are found to be skimping, the provider has the option of imposing a penalty that reduces your payment if you file a claim.
Agreed Value
If you opt for the agreed value for Commercial Property Insurance Birmingham AL, all parties will sign an agreement before the policy is activated. It suspends the coinsurance clause, too.
Like us on Facebook for more updates.
