What Is Building and Personal Property Coverage Form?
Building and personal property coverage form is a type of commercial insurance policy designed to cover direct physical damage or loss to commercial property and its contents. This type of insurance defines specifically what property is covered—such as buildings and personal property, what property is not covered—such as cash and animals. The building and personal property coverage form will detail the losses covered, which may include fire and vandalism, but it will outline any additional coverages, exclusions and limitations, and insurance limits and deductibles.
Key Takeaways
- Building and personal property coverage form is an insurance that covers physical damage to commercial property.
- If the building in which a business operates is owned, the policy will likely cover both the building and its personal property, but if the building is rented, it may only cover the personal property.
- Policyholders should inspect their documents to make sure everything that should be covered is covered and purchase additional coverage if needed.
- Building coverage may insure items that are permanently attached to the building itself, while personal property coverage includes property that is not part of the building.
- Building and personal property coverage exclude land, water, plants, roadways, crops, shrubs, money, accounts, instruments, or trees.
Understanding Building and Personal Property Coverage Form
It is important for policyholders to inspect their coverages when they take out a building and personal property coverage form policy to make sure everything that should be covered is covered. If the policy is inadequate, it's usually possible to purchase additional coverage.
Building and personal property coverage form excludes claims for loss or damage to land, water, bridges, roadways, and underground pipes or drains. The policy also excludes any loss to plants, crops, trees and shrubs. It will also exclude losses for certain types of personal property, including deeds, instruments, money, accounts, bills, and securities. Vehicles, watercraft, and aircraft—unless specifically named as insured property—are also excluded.
Covered losses are considered items that are attached to a building, but loss due to wear and tear or dishonest employees aren’t considered to be covered. An insurer may offer additional coverage beyond the basic criteria.
If electronic data is lost in a fire, flood, or other covered events, this coverage will recover the loss that may otherwise impact a business. This does not include data lost due to mistakes, actions of an employee, or the business’s own liability that caused the loss. Electronic data is a special consideration and would require an extra payment in addition to the regular premium.
Businesses located in regions that experience seasonal changes may experience seasonal variations in the value of property or materials. For example, a boating shop may experience a total loss during its peak season of summer rather than slower, colder seasons.
Special Considerations
Coverages a policyholder should look for on a building and personal property coverage form depends on the nature of their needs and financial connections to the commercial property in question. Commercial property insurance policies cover two basic types of property—buildings (also called real property) and business personal property.
If someone owns the building in which their business operates, a commercial policy should cover both the building and the BPP it contains. If renting or leasing, the proper commercial property insurance policy will cover only BPP.
Building coverage normally includes machines and equipment that are permanently installed, such as a furnace, boiler, and air conditioning equipment. Fixtures, or property that is permanently attached to the building such as a built-in bookcase or cabinet, are also covered. Floor coverings, appliances (like refrigerators and dishwashers), fire extinguishers, and outdoor furniture are usually considered BPP.
BPP consists of owned property that is not part of a building and is not otherwise excluded. It includes office furniture, machines and equipment (if not attached to the building), raw materials, goods-in-process and finished goods. Improvements made to a leased building are covered if you paid for them and cannot be legally removed.
The limits of building and personal property form insurance apply separately to each occurrence, except for a small number of additional coverage specified in the policy. BPP coverage is not subject to an aggregate limit that caps a recoverable amount under that coverage during a policy year.
FAQs
Building and personal property coverage form is an insurance that covers physical damage to commercial property. If the building in which a business operates is owned, the policy will likely cover both the building and its personal property, but if the building is rented, it may only cover the personal property.
What is the meaning of personal property insurance? ›
What is personal property insurance? Personal property coverage — also known as contents coverage on a home policy — helps cover the cost of your personal items if they are destroyed, damaged, or stolen due to a covered loss or peril.
What is building coverage? ›
Building coverage – The percentage of the lot area that is covered by building area, which includes the total horizontal area when viewed in plan. Impervious cover – Any structure, surface or improvement that reduces and/or prevents absorption of storm water into land.
What is building property protection? ›
Building property protection
If belongings that aren't typically considered personal property, like cabinetry and appliances, are damaged in a covered claim, this coverage helps pay to repair or replace them.
What is the meaning of BPP insurance? ›
Business personal property (BPP) insurance offers financial protection against lost, damaged, or stolen business property.
What is a good amount of personal property coverage? ›
The sum of the value of all your items is how much coverage you need. Often, the amount of personal property coverage is determined by using 50% of your dwelling coverage limit. For example, if your dwelling coverage is $400,000, you'll have $200,000 in personal property coverage.
What is the difference between replacement cost contents and personal property? ›
In general, replacement cost coverage pays to replace your belongings with new ones or of similar value if it were new. On the other hand, actual cash pays the value of what your belongings are worth today by considering things like age and wear and tear.
Which of the following is covered by a building and personal property coverage form? ›
BPP consists of owned property that is not part of a building and is not otherwise excluded. It includes office furniture, machines and equipment (if not attached to the building), raw materials, goods-in-process and finished goods.
Does building insurance cover everything? ›
What Does Building Insurance Cover? Building insurance covers the structure and the fixtures inside your building–including any sinks, bathtubs, pipes and bathroom toilets. Garages, sheds and outside fences may also be covered under your policy.
What is the difference between property insurance and building insurance? ›
The same is true for water damage from a burst pipe, or windows broken by a storm. However, building insurance does not cover office equipment or other moveable property, which is why you might also want the protection for your business personal property afforded by standard property insurance.
Property insurance: protects against loss or damage to tangible property, such as a building or its contents. It typically covers damage caused by fire, theft, and natural disasters. Liability insurance: protects against financial loss from legal claims made against the policyholder.
Which of the following would not be covered under a builder's risk coverage form? ›
A builders risk coverage form provides protection against losses on the building, equipment, and supplies, but not to accidents on the job, the land, scaffolding, and theft. The policy does not cover war, nuclear hazards, extreme weather, or government seizure.
Which of the following is not covered under the BOP? ›
A business owners policy does not cover commercial auto insurance, professional liability insurance – more commonly known as Errors & Omissions insurance – workers' compensation insurance or health and disability insurance.
What is the building limit in insurance? ›
The building limit represents the amount of coverage that would be provided to replace the building in the event of a loss.
What is the difference between business personal property and equipment? ›
Business Personal Property (BPP)
This also includes equipment, office furniture, computers, tablets, cell phones, and vehicles purchased and used by the business. If it isn't nailed down, and it's movable in the same way as personal property.
What is the total insured value? ›
Total insurable value is a property insurance term referring to the sum of the full value of the insured's covered property, business income values, and any other covered property interests.
What is the difference between personal property and personal liability insurance? ›
The difference between personal liability and property liability is that property liability covers damage you cause to another person's property, such as in a car accident, while personal liability covers damage or injury to another person which you are legally liable for.
What is insurance on real or personal property called? ›
Sometimes called contents coverage or contents insurance, personal property coverage safeguards your belongings and is a valuable part of your home insurance policy. Learn more about the Best Homeowners Insurance Companies of 2024.
Is VPP insurance worth it? ›
If you suffer a loss due to a fire or a burglary, you'll wish you'd added valuable personal property insurance to your financial portfolio.
How does insurance depreciate personal property? ›
THE DEPRECIATION PROCESS
The adjuster/insurer depreciates certain items to account for their age and wear and tear, and cuts a check for what's called “ACTUAL CASH VALUE” (“ACV”) of the entire inventory. (Often the depreciation that the adjuster/insurer applies to your item is excessive).
