Accidents happen goes the saying and it is the absolute truth. This is why insurance exists. Auto, property, liability. There are policies for every situation and type of property. The legendary actress Betty Grable even insured her legs. This is just one simple example of a monoline insurance policy.
Property insurance is important for home or condo owners and certainly for business owners. Buildings and the grounds on which they sit are vulnerable to damage from many possible problems such as weather, theft, or vandalism. Businesses should have commercial property insurance.
One term you may have heard but not be familiar with is monoline.
Monoline Property Insurance
If you have come across the words monoline property insurance somewhere, you may be curious as to what exactly they mean.
A monoline policy covers just one specific risk. For instance, an auto insurance policy that covered only one vehicle would be considered monoline coverage. Some insurance brokers would consider any customer who holds only one policy to be a monoline client.
Example of a Monoline Policy
A situation in which a monoline policy would be necessary would be covering a classic, collectible car. A standard auto insurance policy would be insufficient in this case. A stand-alone policy for this valuable asset would be based on the appraised value of the vehicle and include coverage for upgrades or extra parts. This would not be covered in a standard auto policy.
Monoline Property Insurance
In the case of insuring properties, most policies have limits to their coverage. A good example of this is floods. Property insurance does not cover damage caused by flooding due to severe weather. A monoline policy specifically covering this problem would be purchased by a property owner. This is an important extra policy for businesses that operate in areas that are prone to floods seasonally.
Earthquakes are another natural phenomenon that is not covered by typical insurance policies. Businesses in states such as California where damage from earthquakes is a common problem will have monoline policies to cover this situation.
Another situation where a monoline policy is necessary is for businesses that have high-value assets. Standard insurance policies have limits as to how much they will cover when a claim is filed. For businesses that may be vulnerable to damage in excess of these limits, an additional policy is necessary.
Gaps in Coverage or Extreme Risks
Standard property insurance policies tend to have gaps in coverage. These may not be a problem for every client but certain types of businesses may need monoline policies to cover these gaps.
Some businesses, such as a nuclear power plant or some chemical companies can pose extreme risks to employees or neighboring properties. The amount of potential damages can come at a huge cost. Adequate coverage must be provided by a separate monoline policy.
Property insurance is one of the most important kinds for any business. Standard policies offer a broad range of coverage. For specialized situations or businesses that are vulnerable to specific types of weather or extreme risk, a monoline policy is needed to provide the coverage to protect the business.
