What does the term "real property" encompass in commercial insurance?

The term "real property" in commercial insurance specifically pertains to land and any permanent structures that are affixed to it. This definition highlights the immovable nature of real property, distinguishing it from other categories such as personal property, which can include movable items. In commercial contexts, real property is crucial because it encompasses not just the physical land but also any buildings, fixtures, and other improvements that enhance the value of the property.

This distinction is important for insurance purposes, as real property typically requires different coverage than personal property. For example, the policies might address risks such as fire, theft, and natural disasters concerning the land and the buildings on it rather than covering items that can be relocated.

Understanding the definition of real property is essential for anyone involved in commercial insurance, as it informs how risks are assessed and what types of coverage are necessary for protecting the ownership and investment in fixed assets.