The most you can be paid for covered loss under the policy is the value for which you insure your property. If you insure your property for less than the replacement value, you may not recover your full damages in the event of a loss.
Furthermore, your Business Owners policy requires that you insure your Business Personal Property (BPP) and Building (if covered by this policy) for at least 80% of the cost that would be incurred to replace the property.
This requirement applies to any loss, full or partial. If your building is not insured to 80% of the full replacement value at the time of loss, your loss payment will be reduced to the greater of the actual cash value of the damaged property or a pro-rated portion based on how far below the 80% requirement you insured the building.
To avoid problems like this, it is best to insure your building and business personal property for 100% of the replacement value.
If you require building coverage, we provide you with an estimate of the full replacement cost value of the building during the quoting process. This is only an estimate, and the data may not be complete or sufficiently capture the unique nature of your property. Please call us at the number at the top of this page if you have any questions regarding the value of your property.