The Wear and Tear Exclusion

What does Wear and Tear Exclusion mean?

An insurance contract’s wear and tear exclusion provision states that the policy does not cover degradation from everyday, normal use. Because every property piece deteriorates over time, insurers would be too expensive to cover such losses. Insurance only covers losses due to unexpected events. Normal wear and tear cannot be avoided, and therefore, insurance policies do not cover it.

If insurers did not exclude wear and tear, they would essentially have to eventually pay for replacement or repairs to every building, tool, and piece of office equipment they insure. This would mean dramatically raising the premiums to pay for these expenses. For example, auto insurance only covers unforeseen events, such as accidents. It does not cover replacements of car parts that wear down over time, such as filters, hoses, and brake pads.

Business Property Insurance

Commercial Property Insurance is designed to cover most physical properties your business owns. The focus of this insurance is to help businesses recover quickly after suffering property damage or loss.

Many businesses choose to purchase this policy as insurance on a physical building. However, other types of business property can be covered by this policy, including physical copies of company records which are often stored onsite.  The cost of rebuilding after a building has been destroyed or replacing property that has been completely lost are common coverage areas.

This type of insurance insures any revenue that is lost, and that can often be recouped. This insurance is designed specifically to help a business continue operating after property loss or damage.