So what is the ACORD 140 Property Section? The ACORD 140 form is a standardized insurance application that is designed to handle the basic underwriting and rating needs for commercial property exposures.
ACORD 140 Property Section
There are many different types of commercial insurance policies. The ACORD 140 Property Section refers to the physical structure of your business and its contents.
When you are shopping for a policy, you may find that agents ask many questions about the specs of your building and the equipment your business owns.
Insurance companies aim to determine the proper amount of coverage by inquiring about equipment, building specifics, and inventory. The goal is to have everything covered in case of an emergency.
The Property Section accommodates two locations, with coverage and rating information recorded separately for each location. This form was designed to be used in conjunction with the Commercial Insurance Application – ACORD 125.
Tips On Filling Out The ACORD 140
Here is some info to help fill out the application properly:
- Premises # and Address – Determine how many properties and buildings will be covered (for larger number of properties, and excel spreadsheet can be filled out and attached with this ACORD) and the address of their location. Also a description of what the building/s is (ex: Business complex, Tavern)
- Subject of Insurance – Distinguish between the Building, Business Property and Business Income. List the Amount of coverage needed, if there is a Co-insurance clause %, how the property will be valued (Actual Cash Value vs. Replacement Cost), desired deductible, and under “Cause of Loss” indicate Special, Broad or Basic Form.
- Building Information – To determine rates it is important to fill out all the boxes in this section. The construction type, protection class, year built, building improvements, alarm system and fire protection on property all play a vital role in rating and obtaining proper coverage for the premises.
- Page 2 can be used for additional premises, please include information for all properties to be covered.
The Structure
The actual building is the first thing to be checked out when a business has property damage. When deciding on a policy, it is important to also think about fires and floods. Consider the risk of flood events in your area. An extra flood or fire policy may be beneficial for high risk areas. A declared flood zone, for example, may be an area where separate flood insurance is necessary. If your business is in the same building as a restaurant, you may want to consider a bonus fire policy.
Once you have decided on coverage needs, you can take a look at the amount to be covered. This amount is your availability to pay for damages to the structure of your business. Repairs to restore the structure must fit within this budget to be covered by property insurance. These may include flooring, sheet rock, or windows.
Equipment
The equipment used for business transactions usually costs a significant amount to replace. This section of your property policy should be prepared well ahead of time. Every piece of equipment should be documented at the time of purchase. Copies of receipts should be sent to your insurance agent for safe keeping. Depreciation values may limit the amount of money that is reimbursed for equipment. Receipts for repairs and maintenance can help to ensure proper compensation. Other items, such as furniture, are also covered under the property part of the policy. An inspection usually takes place to decide on the payout amount, so do not dispose of anything until after this meeting.
Inventory
Inventory is considered to be part of your property. The damages from inventory include the cost of purchase, as well as future earnings from selling the items. A value is decided on by the agent and confirmed with you. Inventory for retail businesses often includes things like clothes, electronics, and toys. An electronics store may have additional coverage due to the expensive nature of the items. The amount of merchandise on the premises should be properly documented at all times to make a value calculation easier.
Correct Information
It is important to be truthful on this form. It says, “ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR ANOTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM CONTAINING ANY MATERIALLY FALSE INFORMATION, OR CONCEALS FOR THE PURPOSE OF MISLEADING INFORMATION CONCERNING ANY FACT MATERIAL THERETO, COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A CRIME AND SUBJECTS THE PERSON TO CRIMINAL AND [NY: SUBSTANTIAL] CIVIL PENALTIES. (Not applicable in CO, DC, FL, HI, KS, MA, MN, NE, OH, OK, OR, VT or WA; in LA, ME, TN and VA, insurance benefits may also be denied) IN THE DISTRICT OF COLUMBIA, WARNING: IT IS A CRIME TO PROVIDE FALSE OR MISLEADING INFORMATION TO AN INSURER FOR THE PURPOSE OF DEFRAUDING THE INSURER OR ANY OTHER PERSON. PENALTIES INCLUDE IMPRISONMENT AND/OR FINES. IN ADDITION, AN INSURER MAY DENY INSURANCE BENEFITS, IF FALSE INFORMATION MATERIALLY RELATED TO A CLAIM WAS PROVIDED BY THE APPLICANT
IN FLORIDA, ANY PERSON WHO KNOWINGLY AND WITH INTENT TO INJURE, DEFRAUD, OR DECEIVE ANY INSURER FILES A STATEMENT OF CLAIM OR AN APPLICATION CONTAINING ANY FALSE, INCOMPLETE, OR MISLEADING INFORMATION IS GUILTY OF A FELONY OF THE THIRD DEGREE.
IN KANSAS, ANY PERSON WHO, KNOWINGLY AND WITH INTENT TO DEFRAUD, PRESENTS, CAUSES TO BE PRESENTED OR PREPARES WITH KNOWLEDGE OR BELIEF THAT IT WILL BE PRESENTED TO OR BY AN INSURER, PURPORTED INSURER, BROKER OR ANY AGENT THEREOF, ANY WRITTEN STATEMENT AS PART OF, OR IN SUPPORT OF, AN APPLICATION FOR THE ISSUANCE OF, OR THE RATING OF AN INSURANCE POLICY FOR PERSONAL OR COMMERCIAL INSURANCE, OR A CLAIM FOR PAYMENT OR OTHER BENEFIT PURSUANT TO AN INSURANCE POLICY FOR COMMERCIAL OR PERSONAL INSURANCE WHICH SUCH PERSON KNOWS TO CONTAIN MATERIALLY FALSE INFORMATION CONCERNING ANY FACT MATERIAL THERETO; OR CONCEALS, FOR THE PURPOSE OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO COMMITS A FRAUDULENT INSURANCE ACT.
IN MASSACHUSETTS, NEBRASKA, OREGON AND VERMONT, ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR ANOTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM CONTAINING ANY MATERIALLY FALSE INFORMATION, OR CONCEALS FOR THE PURPOSE OF MISLEADING INFORMATION CONCERNING ANY FACT MATERIAL THERETO, MAY BE COMMITTING A FRAUDULENT INSURANCE ACT, WHICH MAY BE A CRIME AND MAY SUBJECT THE PERSON TO CRIMINAL AND CIVIL PENALTIES.
IN WASHINGTON, IT IS A CRIME TO KNOWINGLY PROVIDE FALSE, INCOMPLETE, OR MISLEADING INFORMATION TO AN INSURANCE COMPANY FOR THE PURPOSE OF DEFRAUDING THE COMPANY. PENALTIES INCLUDE IMPRISONMENT, FINES, AND DENIAL OF INSURANCE BENEFITS.”
More On ACORD Forms
You can find more applications on the ACORD forms list.
ACORD 140 Property Section – The Bottom Line
We hope this article on ACORD 140 Property Section has been informative. Property insurance coverage is a financial safety net when damage occurs to a business. The items that become damaged can often affect monetary gain for weeks at a time. Repairs may be invasive enough to keep people out of the building, making it impossible to meet with clients. The replacement of equipment and inventory may also take a long to get back. Property coverage helps to secure structures, equipment, and inventory in case of an emergency. Business owners can help to secure proper coverage amounts by documenting the things they own. Damage to property does not have to cause financial despair.