From bars to grocery stores to protecting a client's leases, the diversity of Main Street risks demands an agent's attention and professional expertise. A good agent will target multiple risks for multiple clients who own property, lease property or run a business on Main Street.

While property coverage for Main Street accounts may be easy to obtain, with coverage available on a package basis, some accounts need special treatment for exposures not covered in a standard package policy. Knowing what questions to ask can help ensure your client 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 of establishments. When writing coverage, are you including all exposures, such as, liquor liability, crime coverage and employment practices liability? All of these are significant exposures for this class and must be considered.

o Beauty and Barber Shops.

Do you have professional liability included in your beauticians or barber shop risks? Without it, insureds face risks from such things as allergic reactions to hair colorings and alleged hair loss, for example.

o Grocery Stores or Supermarkets.

Both of these risks need food spoilage coverage and equipment breakdown coverage. An omission of these exposes agents to possible errors and omissions claims in the event of a loss.

o Jewelry Stores and Pawn Shops.

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

This isn't enough coverage for a jewelry store or pawn shop. The insured should have a jewelers block policy, which will address the limit restriction and will add specific coverage and coverage enhancements the risk requires. For example, the jewelers block policy has no coinsurance to accommodate large swings in inventory values and coverage for off-premises exposures, including parcel services.

o Lessor's Risk.

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

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

o Office Buildings.

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

OTHER CONSIDERATIONS

Value aggregations present an underwriting issue unless careful underwriting practices are enforced. Companies may have larger values insured than they are comfortable with, or they insure another property adjacent to an existing insured, resulting in overexposures.

Among Main Street exposures, there are many older structures that may not meet current building codes. These present difficult underwriting issues requiring ordinance and law coverage not normally contemplated.

Many cities and towns have ordinances regulating the type of rebuilding allowed after a serious fire. If that's the case, ordinance and law coverage can be essential to your client. The cost to repair a building properly in excess of the replacement cost 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 have a greater risk of loss of business income than damage to the property itself. There are several kinds of coverage available, such as monthly limitation of recovery versus a coinsurance-based form.

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

Don't insure a client's property for market value. Use the available replacement cost sources to ensure values are adequate. If you don't, you may pay part of your insured's claim under your E&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 only protect you, but also will protect your insureds and increase your business.

David J. Price is executive vice president and chief underwriting officer for Burns & Wilcox, a managing general agent and specialty broker headquartered in Farmington Hills, Mich. Mr. Price may be contacted at [email protected].