Property damage insurance

Property damage insurance (PD)

Coverage of tangible assets in the event of physical damage due to the insured event. Depending on the insured items and covered risks, this type of insurance can be broken down into the following categories:

Named-perils insurance

Insurance against fire and other fortuitous events (FLEXA – fire, lightning, explosion, aircraft + EC – extended coverage, e.g. hurricane, flood, hail, vehicle impact, etc.), enumerating the covered risks. The most important coverage limits include both the events excluded in the general terms and conditions of insurance and in the definitions of covered events, which is why it is particularly important to consult a broker who knows what provisions require extra attention during the preparation of an insurance plan.

All-risks insurance (AR)

Usually provides wider coverage than named-perils insurance because it does not define (narrow down) the scope of covered events and only defines the exclusions.

Electronic equipment insurance (EEI)

Insurance of electronic equipment against damage caused by, e.g., mishandling, fall, water, third-party actions, fortuitous events, overvoltage or defective materials. Particular attention should be paid to equipment age limits used in the determination of claim payment and sum insured, which should account for the rapid deterioration of the value of generic electronic equipment, such as laptops, smartphones or tablets. There may also be problems with the classification of equipment as electronic equipment or successful coverage of equipment installed in vehicles, vessels, aircraft or underground equipment.

Business interruption insurance (BI)

This type of insurance is designed to stabilise the financial performance of an enterprise by making it immune to external events beyond the entrepreneur’s control that may be insured.

Property damage frequently disturbs or interrupts the functioning of the company, usually reducing revenue. The loss of revenue, however, is usually not accompanied by a proportionate decrease of costs, particularly fixed costs. The more severe and long-lasting the interruption, the more difficult it is to cope with financial liabilities, which may cause the company to lose financial liquidity or go bankrupt.

The purpose of the business interruption insurance contract is to provide the company with funds sufficient to cover fixed costs and recover profit lost due to the damage.