The following are some standard definitions that help you measure the range of losses possible in the event of damage to your business.


A building includes the building or structure itself, as well as inside and outside fixtures, permanently installed machinery and equipment, and equipment used to service the building. This includes refrigeration, cleaning, cooking and other equipment.

Business Personal Property
The furniture and fixtures, machinery and equipment, stock and other personal property owned by the insured and used in the business. Also includes labor, materials or services furnished or arranged by the insured on personal property of others, use interest of the insured as a tenant in improvements and betterments made to the premises, and leased personal property for which the insured is contractually responsible to provide coverage.

Personal Property of Others
Contents, business personal property, and any other property, excluding real property, not owned by the insured.

Improvements & Betterments
Represents the insured’s interest in improvements and betterments made to a building occupied but not owned by the insured. Coverage for this property may be written separately on the policy by showing a limit for it on the declarations or by including it in the business personal property limit. Remodeling an existing building to meet the functional requirements of the operation is expensive and represents a real insurable interest.

Applies to direct loss or damage by flood to buildings and their contents on either a replacement-cost or an actual cash-value basis. Coverage is available in standard markets through difference in conditions (DIC) forms or with other coverage forms developed by individual carriers and written only in select areas. In areas declared eligible by the Federal Insurance Administrator, agents and brokers may arrange for insurance directly with the National Flood Insurance Program or with participating insurance companies.

Loss or damage caused by earth movement is excluded by all three primary causes of loss forms. Coverage for earthquake damage is available in three different ways. The earthquake cause of loss may be included by using an earthquake cause of loss form. A difference in conditions (DIC) policy may be purchased with earthquake as a covered cause of loss, or a separate earthquake policy may be purchased from a nonstandard insurance company. The first two options are the most cost effective, but the nonstandard market may be the only place to obtain this coverage in certain earthquake-prone areas or with certain types of properties. Deductibles are usually expressed as a percentage of the amount of insurance and range from 1 percent to 10 percent.

Business Income
This is a time-element coverage, which pays for loss of earnings or income when business operations are interrupted, curtailed or suspended due to property loss as a result of an insured cause of loss. Also covered are loss of rents and rental value. Extra expenses incurred to continue operations at another location are included as long as they reduce the total amount of loss.

Extra Expense
Pays all sums required for an insured to get back in business as soon as possible, without regard to the income to be generated by the return to business. This includes, but is not limited to, transportation fees when using next-day service instead of normal shipping schedules, any surcharge to put a rush on a purchase order, or special set-up fees charged for a manufacturing order. When money can be used to properly re-open a business, those expenses are paid under this form. This coverage should be considered in cases where no business income loss will be sustained but where considerable extra expenses will be needed in order for a business to resume operations, regardless of the circumstances.

Ordinance or Law Coverage
A property endorsement that provides the insured the option to purchase coverage for three types of common building ordinance or law requirements, which apply after an insured has suffered a physical damage loss, such as fire. These ordinance or law damages are normally excluded in standard property coverage forms. The coverage available in this endorsement represents the cost to demolish the undamaged portion of the building, to replace with superior construction as required by law, and to clear the land of debris after demolition.

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Let Lyman & Sheets help you navigate the insurance landscape.

When I arrived 15 minutes after receiving a call about a fire at our business, I was amazed to see Dave Drayton already on the scene and in contact with our carrier. He and his team saw us through the entire claim and rebuild process, and we received a very fair settlement. This is a good example of why we use Lyman & Sheets for our insurance needs.

Joseph P. Maguire
, Wolverine Development Corporation