Commerical Insurance Coverage Definations


Liability Coverage

General Liability: Pays all sums an insured is legally obligated to pay as damages because of bodily injury, property damage or personal injury and advertising injury.

Directors and Officers Liability: Pays those sums the insured is legally obligated to pay as a result of a claim against any insured for wrongful acts arising out their capacity as a director, trustee, officer, employee or committee member of the insured organization.


Property Coverage

Back up of Sewer or Drains: Pays for loss or damage caused by water that backs up or overflows from your sewer or drain or
enters into and overflows from a sump pump or any other system designed to remove subsurface
water from a foundation area.

Building Ordinance or Law - (A) Loss to undamaged portion of building:  Covers loss in value of the undamaged portion of the building due to demolition pursuant to a building ordinance or law.
Building Ordinance or Law - (B) Demolition Cost: Covers the cost to demolish and remove debris of undamaged parts of the building when it is required by building ordinance or law.
Building Ordinance or Law - (C ) Increased Cost of Construction: Covers the increased cost to repair, reconstruct or remodel damaged or undamaged parts of the building to comply with a building ordinance or law.

Employee Dishonesty: Pays for direct physical loss to business personal property and money and securities
resulting from dishonest acts of the insured's employees.

Limited Coverage for Fungi, Wet Rot, Dry Rot and Bacteria: Pays for loss or damage by fungi, wet or dry rot or bacteria, resulting from certain causes of loss if all reasonable means were used to save and preserve the property from further damage at the time of
and after that occurrence.

Mechanical Breakdown: Pays for direct damage and resulting loss of income caused by or resulting from covered equipment breakdown.

Unit Owners: Pays for direct physical loss to buildings and structures at the described premises, including completed additions, fixtures outside of individual units, permanently installed machinery and equipment, fire extinguishing equipment, outdoor furniture, floor coverings, and appliances used for refrigerating, ventilating, cooking, dishwashing or laundering not contained within individual units.  Building coverage for condominiums excludes any of the following types of property contained within a unit. Fixtures, improvements and alterations that are part of the building structure; appliances used for refrigerating, ventilating, cooking, dishwashing, laundering, security or housekeeping; any other personal property owned by, used by or in the care, custody or control of a unit-owner.  The insured (the Association) has the option to cover unit-owners building property. This should always be done if the Association by-laws require such coverage. 


Property Valuation Types

Actual Cash Value: The ACV options allows customers to cover the property for its depreciated value (the cost to replace the property with new property of like kind and quality less depreciation).

Agreed Amount: This option states that a policy qualifies for replacement cost with no co-insurance penalty at time of loss provided that the amount of insurance coverage under the policy is an excess of 90% of the full replacement cost when bound.

Extended Replacement Cost: Pays for repair or replacement of the building(s) at the described premises, up to a specified amount higher than the limits of insurance shown on the Declarations page, when replacement cost exceeds the policy limit.

Guaranteed Replacement Cost: This option guarantees that the insurance company will pay the replacement cost of the building without regard to the Limit of Insurance shown on the declaration provided the building is insured 100% to value. 

Replacement Cost Coverage: Valuation option that provides for replacement cost of damaged property without deduction for depreciation, provided certain policy conditions are met.