Glossary · Reading the business
Hazard Insurance
In short
Protects the business's physical assets, like buildings and equipment, from damage due to events like fire or storms. Lenders require this to protect their collateral.
What it means in a deal
Your lender will require you to maintain adequate hazard insurance on all business assets that serve as collateral for the 7(a) loan. This ensures that if a covered event damages these assets, the loan collateral is protected, and the business can recover.
Official sources
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Hazard Insurance
- What environmental due diligence is required for real estate collateral located in a flood hazard area for a 7(a) loan?
- How does disability insurance complement life insurance for business protection?
- How does business overhead expense insurance differ from key-person life insurance?
- Why is long-term disability insurance considered a vital complement to business life insurance?
- When is term life insurance more suitable than permanent life insurance for business protection?
- Is a decreasing term life insurance policy acceptable for the SBA's life insurance requirement on a 7(a) loan?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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