When purchasing a Commercial Property Insurance Policy, business owners often focus on protecting their buildings and business property. However, there’s another critical coverage that can safeguard your financial interests—Coverage C: Personal Property of Others. This coverage is essential for businesses that handle, store, or maintain property belonging to others. Let’s dive into what Coverage C is, why it matters, and whether your business should consider adding it to your policy.
What is Coverage C?
Coverage C in a Commercial Property Policy provides protection for property owned by others but in the care, custody, or control of the insured business. This means that if your business is responsible for holding or working on third-party property and it gets damaged due to a covered peril, this coverage can help pay for repairs or replacement.
Who Needs Coverage C?
Several types of businesses regularly handle property that doesn’t belong to them. If your business falls into one of these categories, Coverage C could be essential:
- Warehouses & Storage Facilities – Businesses that store goods for clients.
- Repair Shops & Service Centers – Businesses that fix vehicles, electronics, appliances, or other items.
- Dry Cleaners & Laundries – Handling and cleaning customer clothing.
- Manufacturers & Processors – Businesses that temporarily house customer-owned materials during production.
- Movers & Logistics Companies – Businesses that transport or temporarily hold customer property.
What Does Coverage C Protect Against?
Like other parts of a commercial property policy, Coverage C helps cover losses caused by named perils, such as:
- Fire
- Theft
- Vandalism
- Windstorm or hail damage
- Water damage (subject to policy terms)
However, it’s crucial to review your policy details, as exclusions may apply. For example, standard policies may not cover wear and tear, mechanical breakdowns, or intentional damage.
How Much Coverage Do You Need?
The amount of Coverage C your business requires depends on:
- The value of the customer property you typically handle.
- The level of risk associated with your business operations.
- Your ability to cover potential losses out of pocket.
Many policies allow businesses to set specific limits based on their needs, but higher limits may result in increased premiums.
Why Coverage C Matters
Without this coverage, your business could face significant financial liability if a customer’s property is damaged or lost while under your care. Even if your contract states that you’re not responsible for such losses, clients may still hold you accountable, leading to disputes, lawsuits, and reputational damage.
Final Thoughts
If your business regularly handles customer property, Coverage C in your Commercial Property Policy is a must-have. It provides an added layer of financial protection, ensuring that you’re not left covering costly damages out of pocket.
Not sure if your business needs Coverage C? Speak with an experienced insurance agent to assess your risks and ensure you have the right coverage in place.
Looking for expert insurance guidance? Eugene C. Yates Insurance Agency can help you find the best commercial property policy tailored to your business needs. Contact us today for a free consultation and quote!