For many commercial property owners, the last thing on their mind when shopping for commercial property insurance is the current need for repairs to their property. Unfortunately, this fact can sometimes leave property owners dealing with a denied claim in the future. This denial is the result of what has become known in the industry as the known loss rule.

What Is the Known Loss Rule?

The known loss rule is really quite simple. This rule refers to the fact that most commercial property insurance will exclude coverage for any claims related to property damage that took place prior to the policy being issued. For example, if your roof was damaged in a storm the week before your policy was issued, you will not be able to file a claim for the cost of repairing or replacing the roof even if the repairs take place after the policy is in effect. This rule will continue to apply even if your roof suffered subsequent damage after the policy was issued due to the prior existing damage.

The Best Way to Avoid a Denial Due to This Type of Policy Exclusion

In order to help ensure your claim for coverage is not denied as the result of the known loss rule, it is important to make any necessary repairs to your property before taking out a new policy. These repairs should either be completed by a professional contractor or should be well documented to eliminate any questions regarding the condition of the property at the time the policy was issued. Taking photographs of the property which contain a date and time stamp is always a good idea when purchasing a new commercial property insurance policy in order to document the condition of the property when the policy was issued. 

A Final Thought

The known loss rule is just one example of a common policy exclusion that many people are unaware of when purchasing commercial property insurance. These policies can also include many other common exclusions such as flood coverage. To make sure you know exactly what your policy covers and ensure that you are taking the necessary steps to secure the level of coverage you need, it is always best to work closely with a reputable insurance agent when purchasing a new policy. This agent will be able to help you closely examine your personal insurance needs and build a custom policy that is perfectly suited to those needs. 

For more information about commercial property insurance, contact a company like Rafail Insurance Agency.