A policy requires that, in order to be covered, each sign must be specifically described including lettering information, the sign's location and coverage amount (limit). If the business buying the coverage wants to reduce its coverage cost by using a deductible, it has to accept one equal to 5% of the applicable coverage limit.
Example: An insured’s Sign policy has a limit of $10,000 and a 5% deductible applies. Later, the insured files a loss and the insurer determines total damages of $1,329. Because of the deductible and limit, the insured is paid $829 ($1,329 - $500 [10,000 X 5%]).
The policy protects against any risk of tangible damage that is not excluded or limited in the coverage form. Some of the events that could cause loss that is not covered include:
- Governmental Action - such as property seized by authorities for emergency use
- Nuclear Hazard
- War and Military Action
- Consequential (indirect) loss - such as a storm destroys a source of power and a company's sign can't be lit for several weeks
- Any breakage that occurs during transportation, installation, repairing or dismantling
- Dishonest acts - such as a custom sign made of expense, in-laid glass panels is stolen by an employee of the covered business
- Short-circuiting or electrical surges
- Tricks or fraud - such as crooks take the sign by posing as municipal electrical inspectors
If your business has made a significant investment in its electric signs, be sure that they are properly covered.