Which of the following is typically excluded from commercial property insurance policies?

In commercial property insurance, certain types of risks are commonly excluded to limit the insurance company's liability. Flood damage is typically excluded from standard commercial property insurance policies because it is considered a high-risk exposure. This exclusion is based on the fact that flooding can cause significant and widespread destruction, and the actuarial data suggest that such events can be more frequent and have higher loss potentials than other perils.

To cover flood damage, businesses usually need to purchase a separate flood insurance policy, often through the National Flood Insurance Program (NFIP). This segregation helps insurers manage risk and access the necessary funds to cover catastrophic losses without overburdening standard property policies.

In comparison, fire damage, theft of property, and vandalism are generally covered by standard commercial property insurance policies, though specific terms and coverage limits may apply. Understanding these exclusions is essential for businesses to ensure they have adequate coverage for all potential risks they may face.