Commercial property insurance is essential protection for business owners, safeguarding your physical assets, buildings, equipment, inventory against unexpected losses. However, like all insurance policies, commercial property insurance has exclusions, which are specific situations or types of damage that are not covered. Understanding these common exclusions is key to avoiding costly surprises and ensuring comprehensive protection tailored to your business needs.
Here’s a breakdown of 8 common exclusions you should be aware of when reviewing or purchasing commercial property insurance.
One of the most widespread exclusions is wear and tear, the gradual deterioration of property over time due to normal use. Insurance protects against sudden or accidental damage, not the inevitable aging of roofing, plumbing, or structural elements. Regular maintenance is your responsibility to avoid damage from wear and tear.
Closely related is damage resulting from neglect. If loss occurs because a business owner failed to repair known issues or properly maintain the property (e.g., a pipe bursts because it wasn’t winterized), insurers may refuse coverage. Staying on top of upkeep is crucial.
Flood damage is almost universally excluded from standard commercial property insurance. Likewise, earthquake damage is not covered unless you have a specific endorsement or a separate policy. Businesses located in flood or seismic zones should purchase additional specialized coverage through government programs like the National Flood Insurance Program (NFIP) or private insurers.
Damage caused by war, terrorism, or nuclear hazards is usually excluded. While these events may seem unlikely, they pose significant risks, and some policies require separate terrorism endorsements. Nuclear risks remain a standard exclusion.
Damage or liability arising from pollution or environmental contamination—whether sudden or gradual—is generally excluded. This is particularly relevant for businesses in industries where hazardous substances are present. Environmental liability insurance can help fill this gap.
If your building suffers a covered loss but must be rebuilt to comply with updated building codes or ordinances, your standard policy may not cover the additional costs. This exclusion can leave you bearing expensive upgrades unless you have ordinance or law coverage endorsement.
Many commercial policies restrict or void coverage if your property is vacant for an extended period, often 60 days or more. Vacant buildings face increased risks such as vandalism or unnoticed damage, so insurers require special vacancy permits or separate vacant property policies to maintain coverage.
Any damage resulting from intentional acts or illegal activities by the insured or related parties is excluded. Insurance protects against unintentional loss, not deliberate damage.
Knowing what your commercial property insurance does not cover empowers you to address gaps proactively. At Scavone Insurance Agency Center LLC, we specialize in helping business owners identify these exclusions and customize insurance solutions that protect you fully—from flood endorsements to vacancy permits and environmental liability coverage.
Don’t let unexpected exclusions put your business at risk. Contact us today for a thorough policy review to ensure your coverage matches your company’s unique risks and needs.
Contact us today to schedule your policy consultation. Secure your business’s future with confidence. You can also call us directly at (914) 428-7111.
Floods are excluded because flood damage risk is geographically concentrated and often catastrophic. Separate flood insurance is available through the National Flood Insurance Program (NFIP) or private insurers.
Standard policies often reduce or cancel coverage after a vacancy period. You can request a vacancy permit or purchase vacant property insurance to maintain protection.
Yes, many insurers offer endorsements to cover increased costs for complying with new building codes after damage.
Consider adding environmental or pollution liability coverage to guard against claims and damages related to contamination.
Get a Customized Quote and Additional Information From Us on How Our Insurance Products Can
Meet Your Personal and Commercial Needs.
