Property Coverage And Property Covered
This page brought to you by the property blog.
Property insurance can cover your business for damages or loss to your business property due to theft, fire or other causes. There is a good deal of variation among policies on what property and what risks are covered and what the coverage is. Be sure you are absolutely clear on these terms when you choose a policy. In considering property coverage, there are main issues to think about. What business property should you insure? What perils will the property be insured against? In other words, under what conditions will be entitled to receive payment from the insurance company? What dollar amount of insurance should you carry? Obviously, the higher the amount, the higher the premiums. You do not want to waste money on insurance but you do want to carry enough so that a loss would not jeopardize your business. Should you buy coverage for replacement cost or for the present value of the property?
Your insurance policy will contain a section called Building and Personal Property Coverage Form that lists exactly what property is covered. If you own the building you're occupying, be sure the building is covered including completed additions, permanently installed fixtures, machinery and equipment, outdoor fixtures such as pole lights and property used to maintain or service the building such as fire extinguishing equipment. The policy may also cover additions under construction as well as materials, equipment, supplies and temporary structures on or within 100 feet of the main building.
Be sure that your business personal property is also covered. A typical policy covers the following items located on the business premises: furniture and fixtures, machinery and equipment, inventory, all other personal property used in the business such as technical books and computer discs, leased personal property if you're contractually obligated to insure it, and personal property of others that's in your custody.
Be positive that everything is covered. Check carefully to be sure the policy covers all the types of personal property that you own or expect to own such as furniture, equipment, goods that you sell, products that you manufacture, and raw materials used in the manufacturing process. Typically, various items are excluded such as accounting records, currency, deeds, and vehicles held for sale. If you need coverage on excluded items, you can usually arrange it for an additional premium.
If you rent your business space, your lease may require you to get a specific amount or type of property coverage - and if you lease cars or a fleet, they will be expecting you to attain car insurance too. Be certain to check your lease for any insurance necessities before you purchase a policy. If you bought your business property, you almost certainly paid for title insurance which guards you from challenges to your ownership of the property. You may also want to purchase a life insurance policy that is dedicated to paying the mortgage if anything happens to you. You usually get the best deal if you buy this on your own, not from your mortgage lender or broker.
You will need to understand not only which property is covered by your policy but what types of losses will be covered. Read it carefully to determine what causes of damage is insurable.