Broadening Premise Coverage

As a business owner, your concerns can seem never-ending.  Not only do you worry about your product, inventory, and transactions, but you’re also constantly monitoring your employees, your commercial vehicle fleet, and all your equipment.  And, after all of that, there’s still the building that houses your business.

Many business owners make the mistake of assuming that, should disaster ever strike, the building they are renting will be covered under the building-owner’s property insurance.  However, there are certain scenarios where you, as the business owner, could be held financially responsible for damages caused to a building that you are renting.  Should this ever happen, you’ll be glad to know that you are most likely covered for such a peril under your existing businessowner’s policy.

Broadening premise coverage is provided in many general business owner policies as part of the liability insurance.

This coverage will provide reimbursement should you ever be held responsible for a fire that breaks out in the building that you rent to house your business.  And even if you have the best working-relationship with the building owner and could never imagine him or her bringing a lawsuit against you, times of catastrophe and high financial loss can make people unpredictable.  

Imagine the following scenario:

A fire breaks out in your business one evening, destroying your entire inventory, machinery, and badly damaging the building that you are renting.  It is later determined that a bad wire on one of your machines caused the fire, and the building owner claims that you are responsible, as the machinery missed its last servicing appointment where the bad wire may have been detected and replaced.  In the event that you are held liable, the broadening premise coverage provided through your businessowner’s policy would reimburse the building owner for costs associated with repairs of the structure. 

Broadening premise is one of those insurance coverages that often goes overlooked as a smaller detail of a much larger policy.

However, while the details leading up to use of this coverage are very specific, it’s still a possible scenario that can and does happen.  So be sure to discuss this coverage and its limits* with your independent agent.  And, while you’re there, don’t forget to review your existing businessowner’s policy to ensure that your coverage meets all your current needs.  After all, when you’re confident of your coverage, you can work assured.