The Basics of Property Insurance

Your livelihood is dependent on the survival of your business, so it is imperative that you protect it against any potential threat — big or small. For instance, a fire could destroy your business's warehouse and the contents inside, or a burst frozen pipe could damage important documents and valuable papers. Worse, you could have trouble paying your employees during a loss because your funds are devoted to repairing damage.

If self-insuring is not an option to combat these risks of loss, it is wise to obtain property insurance. This coverage comes in many forms to suit your specific needs. Before purchasing coverage, take a complete inventory of all your business property to determine how much you need to insure.

Types of Property You May Need to Insure

• Buildings and other structures (leased or owned)
• Furniture, equipment and supplies
• Inventory
• Money and securities
• Records of accounts receivable
• Leasehold improvements and betterments
• Machinery/boiler
• Electronic data processing equipment (computers, etc.)
• Valued documents, books and papers
• Mobile property (construction equipment, etc.)
• Property in transit and cargo
• Signs, fences and other outdoor property
• Intangible property (goodwill, trademarks, etc.)
• Business contingency for suppliers
• Ordinary payroll and extra expenses as a result of loss

Types of Property Insurance Policies

Basic property insurance covers losses due to fire or lightning, including the cost of removing property to protect it from further damage. Should you want more than basic coverage, you can buy a standard policy that provides coverage for extended perils, such as floods, windstorms, hail, earthquakes, acts of terrorism, explosion, riots, smoke, civil commotions and vehicles that damage your property. Coverage for vandalism and malicious mischief can also be included.

Are You Buying Enough?

One of the most important aspects of purchasing property insurance is making sure that you have purchased enough coverage. A typical policy will provide the replacement cost value for your building and the actual cash value for your business property. Replacement cost value is the amount necessary to replace or rebuild your building with similar materials, without considering depreciation. Actual cash value is determined by subtracting the depreciation from the replacement cost value.

Most property insurance policies include a coinsurance clause, which requires you to share the cost of covered services up to a moderate percentage of the actual cash value. Should you decide to purchase inadequate coverage, you may be obligated to pay a percentage of all losses.

Insurance Plus LLC understands that determining your business's value is critical, so we're here to help. Contact us today to learn more about our property insurance and loss control solutions.