As your company grows, so do your insurance needs, especially when you have multiple commercial properties.
There are two types of insurance coverage that most commercial properties use: specific and blanket. Specific coverage insures a specific property for a named risk, such as fires, floods, thefts and more. Specific coverage is somewhat limited in that usually one policy only covers one named risk at one location.
Blanket coverage offers protection for a number of different properties and risks. Under a blanket policy, you can group together coverage for multiple buildings and the property in them as long as the buildings are all similar in nature and function.
Blanket coverage makes it easy and convenient to cover all the risks that threaten your properties. However, it’s important to know the characteristics of blanket coverage to see if it can adequately protect your business.
Know the Basics
Because blanket insurance offers coverage for multiple locations, it’s often useful for businesses such as apartment complexes and restaurant chains. The catch is that properties covered under a blanket policy must be similar in nature. For example, a blanket policy typically does not cover a business’s warehouse and storefront under the same policy.
Coverage under a blanket policy is generally triggered in the event of any loss associated with a named property. This can include fires, floods, thefts, personal injury liabilities and more. While blanket coverage typically costs more than specific coverage, blanket coverage provides broader protection by protecting against all liabilities simultaneously.
Additionally, blanket policies also offer protection for equipment, inventory or furnishings located in or around covered structures. Unlike specific coverage, which only provides protection for items that are individually listed in the policy, blanket coverage provides broad coverage for your business’s property—even if it’s moved between two or more locations. This allows for more flexibility if you need to frequently move equipment to conduct business.
Understand the Limits
Under blanket coverage, all of your covered buildings and the property in them is covered until the total policy limit is met.
For example, if your business owns three warehouses that are each valued at $1.5 million, you would purchase a blanket policy with a limit of $4.5 million to protect all three properties. If one warehouse was destroyed in a fire, and the cost to replace the building was actually $1.75 million—more than the originally estimated value of the property—your blanket policy would still provide full coverage (up to the $4.5 million limit). A specific coverage policy in the same scenario would only reimburse you up to the limit of the single property.
Find the Right Policy
Finding the right policy for you varies based on a number of factors. Partner with one of our advisors who can work with you to help determine your unique risk profile and which coverage is right for your properties. Connect with us at 614-453-4400 or info@oh-ins.com
Dan Overmyer, CPIA, CLCS, is a partner with Overmyer Hall Associates, Central Ohio’s largest privately owned property and casualty insurance agency.