Main Streets can be a boon of opportunities to savvy retailagents.

When it comes to property risks, commercial property isundoubtedly the backbone of the property class. Commercialproperties are numerous; exposures are diverse.

In short, commercial property is everywhere.

Main Streets are a varied and interesting mix of exposures,encompassing both low-and high-hazard risks.

From bars to grocery stores to protecting a client's leases, thediversity of Main Street risks demands an agent's attention andprofessional expertise. A good agent will target multiple risks formultiple clients who own property, lease property or run a businesson Main Street.

While property coverage for Main Street accounts may be easy toobtain, with coverage available on a package basis, some accountsneed special treatment for exposures not covered in a standardpackage policy. Knowing what questions to ask can help ensure yourclient is properly protected with special coverage provisions.

A TRIP DOWN MAIN STREET

o Bars and Taverns.

Every town has at least one or two of these types ofestablishments. When writing coverage, are you including allexposures, such as, liquor liability, crime coverage and employmentpractices liability? All of these are significant exposures forthis class and must be considered.

o Beauty and Barber Shops.

Do you have professional liability included in your beauticiansor barber shop risks? Without it, insureds face risks from suchthings as allergic reactions to hair colorings and alleged hairloss, for example.

o Grocery Stores or Supermarkets.

Both of these risks need food spoilage coverage and equipmentbreakdown coverage. An omission of these exposes agents to possibleerrors and omissions claims in the event of a loss.

o Jewelry Stores and Pawn Shops.

Many jewelry stores and pawn shops are being written underbusinessowner policies or similar package., but a standard propertyform has a $2,500 limit for any loss involving jewelry.

This isn't enough coverage for a jewelry store or pawn shop. Theinsured should have a jewelers block policy, which will address thelimit restriction and will add specific coverage and coverageenhancements the risk requires. For example, the jewelers blockpolicy has no coinsurance to accommodate large swings in inventoryvalues and coverage for off-premises exposures, including parcelservices.

o Lessor's Risk.

Is your client simply renting or leasing buildings to others? Ifso, lessor's risk coverage is critical protection.

Does your insured have the necessary insurance language in thelease or not? The answer to this question may change the insurancecoverage needed.

o Office Buildings.

Have you covered your clients' special exposures, most notablyequipment breakdown? There also are accounts receivable, valuablepapers and other computer general exposures needing protection.

OTHER CONSIDERATIONS

Value aggregations present an underwriting issue unless carefulunderwriting practices are enforced. Companies may have largervalues insured than they are comfortable with, or they insureanother property adjacent to an existing insured, resulting inoverexposures.

Among Main Street exposures, there are many older structuresthat may not meet current building codes. These present difficultunderwriting issues requiring ordinance and law coverage notnormally contemplated.

Many cities and towns have ordinances regulating the type ofrebuilding allowed after a serious fire. If that's the case,ordinance and law coverage can be essential to your client. Thecost to repair a building properly in excess of the replacementcost is insured, which includes coverage for demolition cost.

Every risk on Main Street needs business interruption coverage,which must include extra expense coverage. Some insured's may havea greater risk of loss of business income than damage to theproperty itself. There are several kinds of coverage available,such as monthly limitation of recovery versus a coinsurance-basedform.

Lastly, don't forget the basics when it comes to insuring basicproperty risks. Each Main Street business should be insured forreplacement cost coverage. If you write the policy including thisimportant extension, the policy will indicate that the amount ofcoverage purchased is equal to at least 80 percent of the currentreplacement cost of building and business personal property.

Don't insure a client's property for market value. Use theavailable replacement cost sources to ensure values are adequate.If you don't, you may pay part of your insured's claim under yourE&O coverage.

Main Street insureds are fun but not as easy as they seem.Knowing all the ins and outs of writing this coverage will not onlyprotect you, but also will protect your insureds and increase yourbusiness.

David J. Price is executive vice president andchief underwriting officer for Burns & Wilcox, a managinggeneral agent and specialty broker headquartered in FarmingtonHills, Mich. Mr. Price may be contacted [email protected].