One of the more confusing and overlooked risks in a business is the coinsurance clause included in most commercial property policies. As with most things applied incorrectly, coinsurance can do more harm than good, sometimes even leading to a complete closure of a business. This clause is especially important in manufacturing due to the high replacement cost of equipment, more so if you have custom machinery or machinery that is no longer available.
Coinsurance is a percentage of value that a business is required to carry by the insurance carrier. This