Business Personal Property Insurance: Why You May Need It &
How To Get The Best Coverage
TLTR: In this article, we discuss business personal property insurance, why you may need it, what it covers, and some exclusions. We also discuss the types of business personal property insurance, the cost, and the factors that determine the cost. Lastly, we discuss some additional commercial policies which you should include in your business insurance plan.
Office supplies take up a significant portion of capital to run any business. Most of the supplies are consumable or for one time use, like paper or ink. In an event where your office building is damaged, your office supplies are also destroyed. This can be a financially draining experience.
According to Chron, small businesses with up to four employees spend about $1,000 or more on just office supplies in a year. With a restrictive budget that small businesses usually have, office supplies can create a dent on the business plan.
Office supplies are one of many personal property categories in a business. While the purchase of it is inevitable, you can invest in business personal property insurance coverage to protect your business in case of perish.
In this blog
- What Is Business Personal Property Insurance
- Why Do You Need Business Personal Property Insurance?
- What Does Business Personal Property Insurance Cover
- Exclusions From Business Personal Property Insurance
- Different Types Of Business Personal Property Insurance Coverages
- How Much Does Business Personal Property Insurance Cost
- Policies You Should Purchase with Business Personal Property Insurance
- Frequently Asked Questions (FAQs)
What Is Business Personal Property Insurance
Business personal property insurance policies protect your business from damage to or loss of items. This encompasses office furniture and computers, to even products you sell.
Business personal property insurance financially protects your business from damages that are related to equipment, furniture, and other items. It also covers you in case someone steals or vandalizes your property.
The policy is often overlooked, but it is important to your business. You need business personal property insurance if you have business equipment and products that are not owned by the company or rented from a third party.
Why Do You Need Business Personal Property Insurance?
Disasters can happen at any time and disrupt your day-to-day business. Take TLC Burgers and Fries for example. According to the Texarkana Gazette, TLC Burgers and Fries, a famous 40-year-old restaurant caught fire in June, 2021. Since then, the business has mostly been shut and is set to reopen in December, 2021.
Sometimes, damages caused from the likes of fire or a hurricane can take months if not years to get restored. While having a standard business interruption insurance policy helps you protect your work from loss, having business personal property insurance can help you get back on your feet once your business starts running again.
There are many disasters that you can get coverage from with business property insurance. Here are some of them:
- Breakdown of equipment causing electric damage
- Lighting damage and more
Note: Most insurance policies do not provide coverage from natural disasters such as hurricanes, earthquakes, tornadoes and wildfires. However, if you want coverage from these to be included, you can ask your insurance agent.
Additional to damages caused by disasters, the policy also provides coverage from:
- Riots and more
What Does Business Personal Property Insurance Cover
This policy does not cover your office building; but all the other items in it such as machinery, office stationery, and more are insured against damages such as fires, water damage from plumbing leaks and storms. Here are the main types of personal property the policy covers:
Any kind of electronic devices in your office is protected using business personal property insurance. This includes:
- Coffee machine
- Industry-specific machinery
- Other electronic tools required in an office
If your office sells physical products then you are likely to have an inventory or even a warehouse. This includes items like books, clothes, jewelry, food or anything else that you may sell. Say there’s a plumbing issue that causes significant damage to your warehouse. Business personal property insurance can help you recover on your inventory as well.
According to Ask Wonder, offices spend more than $100 per employee annually for the furniture they need in a work set-up.
The policy provides coverage for any kind of furniture you have used in your office space. This includes chairs, tables, lamps, artwork – even the plants that give it a homey feel!
Office supplies are integral for any business. Business personal property insurance provides coverage for this essential yet expensive part of your work. The policy includes coverage for:
- Stamp pads
- Paper weight and more
Everyone wants their offices to look modern. With innovative work spaces to creative zones, offices seem to have it all. But such upgrades can be costly and damage to them can be costly. The policy covers all the renovations you make to your workplace.
Exclusions From Business Personal Property Insurance
A standard business personal property covers many types of office properties. However, it doesn’t provide coverage for your or your employee’s personal properties. It also excludes insurance for the building and vehicles used for your business.
Different Types Of Business Personal Property Insurance Coverages
|Business Personal Property Insurance Coverage||Covers all insured items.|
|Property Replacement Cost Coverage||Covers business personal property replacement cost up to the limits selected.|
|Broad Form Coverage||Covers property of any kind you may own – not limited to business personal property.|
|Valuation Coverage||Covers business personal property replacement cost up to the limits selected. Also covers the item’s valuation at the time of loss – subject to business personal property exclusion.|
|Theft Coverage||Covers business personal property theft however, it is subject to business personal property exclusions.|
|Injury Coverage||Covers the business items from any kind of damage that may have been caused due to injury. For example, an employee slips and breaks a lamp. The policy would cover this incident. Of course, after the deductibles.|
|Exclusion Coverage||There are many items in an office that maybe excluded from your policy. However, you can get your agent to change your policy and include these items. This form of coverage is known as exclusion coverage.|
How Much Does Business Personal Property Insurance Cost
Business personal property insurance can start from as little as $18 a month. However, the cost of the policy depends on many factors. These include:
Line of Business
Depending on what business you are in, there will be various risks you may have to face. For example, if your business deals with packages or money then it is essential that the policy is included.
Small-sized businesses need less coverage than larger ones.
Location of Business
This determines the different risks you are exposed to. If you are located in an area with a higher crime rate, your policy may cost you higher.
Years of Operation
Business personal property insurance cost will vary depending on how long you have been in business. If it’s your first business and you are looking for business personal property insurance, be prepared to pay more.
Amount of Office Equipment in Use
The cost will also depend on the number of items you have in use. A business that deals with a lot of machinery or gadgets will have to pay a lot more than a business using only basic office equipment.
Number of Employees
A business with more than one employee will have to pay an annual fee for business personal property insurance.
The business personal property insurance cost will depend on the expected revenue. The more you are anticipated to have, the higher your business personal property insurance cost will be.
Insurance cost will depend on the number of claims you have filed in the last five years. If you haven’t filed any business personal property insurance claims in the past five years, then your business personal property insurance cost will be cheaper.
Policies You Should Purchase with Business Personal Property Insurance
By now, we are sure you know that business personal property insurance only provides limited coverage. To get a full coverage for your business, you should investigate other commercial insurance policies. Some of the most necessary ones are:
Commercial General Liability Insurance (CGLI)
Whether you own a coffee shop, sell clothes, or offer services like landscaping and contracting work; when it comes to the law of liability there’s no such thing as too much coverage. CGLI covers many basic risks business owners face in their run-of-the mill day jobs.
This includes accidents outside your place of work involving someone who was not an employee but also making sure property damage doesn’t put you out on the street penniless with nowhere else to turn for income.
Workers Compensation Insurance
In most states, you must have workers compensation insurance to make sure that your employees are protected in case of injury or illness. This type of coverage includes protection for medical bills from accidents at work and lost wages while they recover. It also provides liability protections so if someone gets injured on the job, it won’t affect how much money is coming into the company because their responsibility will be transferred onto an insurer if there’s a policy in place.
Commercial Auto Insurance
According to Investopedia, the average vehicle cost is $10,742. If you have one or more than one commercial vehicle for your business, you can imagine how expensive accidents could be.
Most personal auto insurance policies can’t cover you for injuries or damages if you drive a car used in the course of your business. Many people don’t know that driving their vehicle while on company time is risky since most personal auto insurance won’t cover an accident caused by such activities.
However, commercial auto insurance coverage is available and it protects drivers against liability claims from injury-causing accidents they cause. The policy also covers property damage arising out of accidents.
Note: There are many commercial insurance policies you can pick and choose from. Make sure you talk to your insurance provider about your commercial insurance needs.
If you’re like most business owners, you don’t want to think about what happens if your property is damaged or destroyed. In today’s economy where small businesses are struggling more than ever before, it pays to have the right protection for your assets and equipment.
A business personal property insurance coverage can cover the cost of replacing your equipment, inventory and other items in the event that they are damaged or lost. You may want to include a commercial package which includes not only this type of coverage but also general liability, worker’s compensation and more.
Contact us today if you have any questions about how best to protect yourself from financial loss due to damage or theft on your premises. Get a free business personal property insurance quote by contacting a local insurance agent today!
Frequently Asked Questions (FAQs)
How Much Personal Property Insurance Do I Need?
As a minimum, you may want to have 10% of your gross annual business revenue as a general guideline. However, if you think that is too much or too little, we suggest you ask your insurance agent.
Is Business Personal Property Insurance Similar To Personal Article Floater?
Yes. The primary difference between Business Personal Property Insurance and Personal Article Floater Insurance in the terms of insurance is how they define “property”.
Personal Article Floater covers any personal property of an individual that’s been lost or damaged while on the insured’s premises. It typically does not cover anything else.
Business Personal Property Liability Insurance typically covers your business location and is generally used commercially.