Coverage is provided for real property (building) and personal property (including betterments and improvements to real property not owned but occupied or leased) for certain perils or causes of loss. Property can be insured for Replacement Cost Value (the cost to replace at today's new market value cost) or Actual Cash Value (the cost to replace at today's prices
less depreciation, based on age and expected useful life). Perils or losses covered are named on the policy. Losses that are not covered are listed as exclusions.
As part of an overall property insurance program, the following coverages can also be obtained:
Boiler and Machinery
Coverage provides protection (of steam boilers, pressure vessels, air conditioning equipment, air compressors, turbines, and all types of production machines) from causes of loss not covered by property policy forms. (Such as explosion, electrical disturbances [other than lightning], and mechanical breakdown). Also personal property of others in the insured's care custody and control is covered.
Policy covers an entire building or other structure during the course of construction, including the building supplies and materials that will become a part of the covered structure. The owner or contractor can purchase coverage.
Coverage applies to extra expenses or costs in addition to normal operating costs necessary in order to keep a business operational after a loss. Business income and extra expense losses apply in the event of loss due to a covered peril under the property form.
Electronic Data Processing
Policy or endorsement covers computer equipment, data, and media usually covered for all perils except those excluded. Equipment is covered for Replacement Cost Value or Actual Cost Value or upgraded value (the cost to replace with the latest comparable state of the art equipment). Media data and records values are valued based on actual cost to replace or a valued basis (a stated value for each item).
A variety of crime coverage forms are available to protect against losses of money, securities, and property by such causes of loss as employee dishonesty, extortion, kidnap and ransom, and computer fraud.
- Employee Dishonesty: Coverage is provided for a criminal act committed by an employee acting alone or in collusion with others. There must be intent by employee to cause employer a loss and to obtain a financial benefit for the employee or someone else.
- Extortion: Coverage is provided for the surrender of property away from the premises as a result of a threat of bodily harm to someone who is, or allegedly is, being held captive.
- Kidnap/Ransom: The insurance covers named employees for individual or aggregate amounts, with deductibles requiring the insured to participate in about 10% of any loss.
- Computer Fraud: This is a specialized kind of theft where a computer is used to steal property from its rightful owner.