Is Your Business Property Adequately Insured?
Check that your policy reflects the correct insurable value.
Most businesses have valuable property that should be insured. These include buildings, supplies, stock, valuable data, furniture, computers, or even loss of income from a business interruption. Your company may manufacture, store, transport, sell, or redistribute a product, or even provide a service that earns thousands of dollars of income every day. Your business is one of your most valuable assets and your company assets and income should be protected by a customized property policy.
Often, property policies are included as a component of a Commercial Package or Business Owners Policy. There may be a package policy that is pre-formatted for businesses like yours. Other times, you may need to specifically request that your policy include coverage for certain types of property. Ask yourself, "What are some potential property losses that could destroy my business?"
If you own a restaurant, you may need coverage for food spoilage from a power loss. Such a business interruption could lead to foodborne illness, contamination, and possibly permanently ruin your restaurant's reputation.
If you own a tech firm, you may need coverage for valuable data lost in a security breach or from a virus. The costs to replace this data, or the loss of your own intellectual property could be devastating.
If you own a manufacturing company, you may opt to insure your stock based on the selling price. If an order has already been guaranteed or is vital to the entire supply chain, you may need insurance to help offset the extra expenses to fulfill your contract after an equipment breakdown or fire.
If you are a contractor who gets involved with building, renovation, or installation, you may need a policy to insure property that you don't own, but is in your care, custody and control until the work is completed, delivered, or accepted.
If you own a gas station, convenience store, or business with frequent daily credit card transactions, you may need to insure the loss of income as a result of damage to your POS system, satellite, or communication lines.
If you own a commercial building, you may need extra coverage for demolition costs and debris removal. This is often needed in urban or cluttered areas, or historically protected areas.
If your building is old or in a town with strict building ordinances, you may need insurance for the increased costs of construction due to updated building codes requiring new and expensive electrical, plumbing and heating systems.
Drycleaners, auto shops, and transportation businesses commonly need insurance for the property of others.
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Businesses of all types have a need for property insurance, but not all policies provide coverage for the hazards that threaten your business specifically. Do you know if your current policy requires you to value your property with one of the aaforementioned valuation methods? In many cases, if your policy has a coverage limit that is less than 80% of the accurate value, you could end up receiving far less than you would expect at the time of a loss (coinsurance clause). As a prudent business owner, we welcome you to a free personal consultation with one of our specialist insurance agents. Your agent will learn about your business, discuss your concerns, and identify the risks that could impact your business. Boynton Insurance Group will help guide you to an insurance carrier with a program specifically for your type of business, and an agent will help you customize your insurance coverage to best protect your company from major property loss and business interruption.
Most property policies cover similar causes of loss, including hostile fire, natural disasters, weather conditions, crime, and accidents. Property policies can be customized to provide enhanced coverage for specific risks. These policies also usually exclude several hazards, such as water damage, fungus, or nuclear exposure. Depending on the nature of your business, you should consider the kind of property that needs to be insured, and check to ensure that your policy reflects the correct insurable value.
Property is generally insured in one of three ways. Replacement Cost Coverage pays the cost of replacing your property, regardless of changes in value. Even if your property depreciates, your policy may be based on the replacement cost rather than the depreciated value. Actual Cash Value provides coverage for the depreciated value of your property. Business property can also be insured on the Agreed Value. In this case, you and the insurance company estimate and agree on a particular insurable value.