An insurance policy that provides protection to the properties against various kinds of risks, such as fire, theft, smoke, wind, hail, weight of ice and snow, lightning and more is called property insurance. It concerns with the specialized forms of insurance like flood insurance, earthquake insurance, home insurance or boiler insurance. This policy also provides liability coverage in case someone other than owner or renter is injured while on the property, and decides to sue. However, it doesn’t cover the damages caused by water sources such as floods, tsunamis, drain backups, sewer backups, groundwater seepage, standing water, etc.
The concept of property insurance was originated in protecting the maritime enterprises of the Phoenicians, Greeks and Romans from periods earlier than 533 A.D. When merchantmen expanded their operations and exploration for new goods they began to pool their resources to spread the risk of loss of their ships, goods, buildings and property among local bankers, other merchants and affluent families. By the 1600s merchants were insuring buildings against fire and goods against theft. Today every single thing is insured so as to reduce the losses.
Property insurance, today, is a very broad concept. It is a multi-billion dollar annual business covering all the losses and risks that different commercial and personal property bears. Today, property insurance covers more than just tangible real and personal property, it has come to recover lost income, business interruptions, computers, business papers, and trademark, patent and copyright infringement.
Property can be insured in two ways: open perils and named perils. Open perils provide compensation to the loss and damages of the property caused by any perils except those that are specifically excluded. It is also called as all-risks policy. Such type of policy is suitable if you want to cover a large number of perils or if you don’t have specific dangers in your area of business, but want a good insurance coverage. Named perils are different than that of the open perils. Named perils policy specifically includes the name of the certain perils, damages or hazards that may occur and covers that only. This type of policy can be adopted when you live in the area that is at risks for certain events or natural disasters, like living near the coasts where hurricanes area common, or living in the Midwest that frequently experiences tornadoes.
