Commercial Property Overview
There are many similarities between a residential property claim and a commercial property claim. The three main differences that distinguish a commercial property claim from a residential claim; policy forms; business interruption; and extra expense coverage.
Business interruption coverage provides protection against loss of income when a business suffers property damage from an insured peril (e.g., Fire, water loss) that interrupts the operation of the business. A typical business interruption policy form provides that the insurer will pay the actual loss of business income the insured sustains during the “interruption” of its operations during the period of restoration. Business interruption policies also normally cover extra expenses incurred during the period of restoration that would not have been incurred without the loss.
The key point that is apparent in both coverages is that coverage depends on the period of restoration. The time it should take a reasonable insured exercising due diligence and dispatch to repair, rebuild or replace the property.