Special Multiperil Insurance (smp)

Definition of "Special multiperil insurance (smp)"

Coverage usually provided for large businesses in four areas:

  1. Section I (Property) The building (s) and contents are covered against either any peril (ALL RISKS basis) or only perils listed in Section I. It is to the advantage of the business to have coverage written on an ALL RISKS basis. Endorsements can be added for sprinkler leakage, business interruption, extra expense, water damage, rental loss, valuable records and papers, mercantile robbery and safe burglary, mercantile open stock burglary, glass and fine arts, or these items can be covered separately.
  2. Section II (Liability)�The insured is covered for actions or non actions that result in liability exposure arising out of ownership, use,possession and/or maintenance of the covered locations and structures. Also covered are the business's activities conducted by the insured whether at or from the covered locations and structures. Endorsements can be added to cover for medical payments, liability arising out of products and completed operations, and liability arising out of operation of a non owned automobile. Additional endorsements can be added to this section to broaden liability coverage.
  3. Section III (Crime)�Coverage for employee dishonesty, premises loss both inside and outside of the structure, forgery by depositions,paper currency that proves to be counterfeit, and money orders. The comprehensive DISHONESTY, DISAPPEARANCE, AND DESTRUCTION POLICY (3-D POLICY) and the BLANKET CRIME POLICY provide these coverages.
  4. Section IV (Boiler and Machinery)�Coverage for explosion of a boiler, engine, turbines, and/or pipes owned or under the control of the insured. Endorsements can be added to cover indirect and consequential losses resulting from accidents associated with the boiler and machinery expenses. The SMP has generally been replaced by the COMMERCIAL PACKAGE POLICY.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Insurance Terms

Limitation imposed on insurance companies by state law. States oversee the insurance industry, being responsible for making certain that the rates are fair, reasonable, and adequate, and ...

Right of a beneficiary of a life insurance policy to exchange the future installments due that beneficiary for a lump sum distribution. ...

Provision in business interruption insurance that excludes coverage for continuing the wages of rank and file employees. Business interruption insurance covers an employer for loss of ...

Section of the Internal Revenue Code that provides for the taking of the proceeds from one life insurance policy or annuity and the reinvesting of these proceeds immediately in another life ...

Covers all employees of a business on a blanket basis with the maximum limit of coverage applied separately to each employee guilty of a crime. ...

Assumption of total disability when an insured loses sight, hearing, speech, or a limb. When such a loss occurs to an insured with disability income insurance, the insurer often assumes ...

Individual retirement account established under the tax reform act of 1986, for a spouse who has unearned income. The maximum annual combined contribution into the worker's and spouse's IRA ...

Ratio of the company's investment in noninvestment grade bonds dividend to its adjusted surplus. This ratio shows how vulnerable the company's surplus is to the market fluctuations in ...

Methods for payment of the value of a policy. An insurance company can select one of three options in settlement of a loss: make a cash payment; take possession of damaged or destroyed ...

Popular Insurance Questions