If you own a commercial property, you may have purchased specific insurance coverage, which insures a specific property against a named risk. Named risks can include thefts, vandalism, floods, and fires, but specific or individual insurance provides coverage only for one named risk at just one location. This makes specific coverage quite limited, which is why blanket insurance can be helpful in such cases. Blanket insurance gives protection for multiple commercial properties, and protection is provided against multiple risks. With a blanket policy, you can bundle the coverage of multiple properties. Understandably, blanket coverage makes it very easy and convenient to provide protection to your properties against all risks. What exactly does blanket insurance cover? Since blanket insurance provides protection for multiple commercial properties, it is generally suitable for those who own apartment complexes and restaurant chains. The only condition is that the buildings must be the same in structure and must have the same purpose. For instance, if you have a warehouse and a storefront, you cannot have blanket insurance for both. You can have blanket insurance for multiple warehouses or multiple storefronts, which means you will need two blanket insurances in the mentioned case. Blanket insurance can also provide coverage for furnishings, equipment, and inventory that is located inside or around the properties. A specific coverage provides coverage only for the items listed in the policy, but a blanket policy will give broad coverage for any commercial property. Even if you move equipment or inventory between two warehouses, these will be covered by blanket insurance, which means you have more flexibility. This is especially useful if your business requires frequent moving of equipment or inventory across locations. How does blanket insurance work? Blanket insurance usually comes into effect whenever there is any loss on a commercial property listed in the insurance. The loss can be due to any event specified in the insurance document, including floods, fire, personal injury liabilities, and thefts. Blanket coverage will protect against all these liabilities simultaneously, which is not possible with specific insurance as it works to protect against a specific liability only. As a result, blanket insurance has broader coverage than specific insurance despite costing more. What are the coverage limits of blanket insurance? When you have blanket insurance, you will have coverage for all the buildings listed in the insurance document; all the property inside these buildings will also have coverage. You get the coverage until the total policy limit is met. For instance, consider that you have a business with four warehouses, each with a value of around $2 million. This means that you will buy blanket insurance with a limit of at least $6 million, and this will cover all the four properties. Suppose one of the warehouses was damaged in flood, and the total cost of restoring the building came to about $2.35 million; this is a value higher than the value originally estimated. If you have specific insurance, you will only get compensation from insurance up to the limit of one property, which, in this case, is only $2 million. However, you will get the full coverage with blanket insurance. This means you will be compensated with $2.35 million, or more if required, up to a maximum of $6 million.
