Types of Property Insurance Policies

All basic property insurance policies generally cover losses caused by fire or lightning and the cost of removing property to protect it from further damage (i.e., removing inventory or equipment from a damaged building so it won't be stolen).

If you want to buy more than the basic coverage you can purchase a standard policy that provides coverage for extended perils including windstorm, hail, explosion, riot, riot attending a strike, smoke, civil commotion, aircraft and vehicles that damage your property. Coverage for vandalism and malicious mischief also may be added.

If you want even broader coverage you should consider adding optional perils to a standard policy. Optional perils include damage to the exterior of a building from falling objects; damage from weight of snow, ice, or sleet; building collapse; water damage from leaking plumbing, heating, or air conditioning pipes or appliances (but not damage from floods, and other natural sources of water, and sprinkler leakage); and glass breakage. Sprinkler leakage and some other perils that are optional in a standard policy may automatically be covered in package policies.

A standard small business policy will usually cover losses from windstorm, hail, explosion, riot and civil commotion, aircraft, and damage caused by aircraft, automobiles or vandalism. A special form policy covers loss by any perils not specifically excluded in the policy. What makes the two policies different is the perils each covers and the options each offers.