Business Property Insurance 101

Business property insurance has become an important aspect of responsible business ownership. One of the most important assets you have as a business owner is your property, so you should strive to protect your business infrastructure by taking out business insurance.  

What is business property insurance all about? Essentially, business property insurance is an easy way for you to protect your business assets.  Think of it like home insurance, only for your business.  Business property insurance provides coverage for everything related to your business, including the business structure, office space, and any related supplies and equipment.

Business property insurance can help protect your assets in the unfortunate event of a fire or other natural disaster.  Business property insurance is something you can depend on when the cost of damages and repairs is too large for you to absorb. Business property insurance can help you pay for reconstruction and replacement in case of an emergency, as specified in your insurance property contract.  

What will your business property insurance cover?  Most business property insurance policies will cover buildings and contents.  Most business property insurance policies cover loss and damages caused by fires, lightning, explosion of gas and boilers or other emergencies or natural disaster.  

Your business property insurance policy may also protect you against "special perils," which may include explosion, riot, vandalism, hate crimes, storms, floods, aircraft damage, road and rail vehicle damage, and pipe and sprinkler leakage.  Most business property insurance will not cover these special perils, unless you expressly request these things.  Make sure you see the specific peril coverage listed on your Declaration of Insurance you'll receive from your agent and review the attachment or rider that comes with your policy.

You can also choose form an "all-risk" business property insurance policy.  This type of policy is available for your business if you want wider coverage.  An all risk business property insurance will cover almost accidental damage or loss.  Pay close attention to what things still are not covered that you want to have covered.  Other things, such as wear and tear, electrical or mechanical problems, or gradual deterioration of business machinations, are generally not covered by an all-risk policy.  However, you can specify to add these things to the contract.  

How much business property insurance should you purchase for your business?  It depends on much coverage you want or need.  The amount of business property insurance that you purchase should reflect the type of coverage that you need.  To take full advantage of your business property insurance protection, you probably want to insure your business premises for the full rebuilding cost or replacement cost.

Why is this important?  This means that when you purchase business property insurance, you will be covering it for the full replacement value of your building and contents. This figure should include required professional fees and cost of site clearance, as well as increased costs of building the new building up to current building codes.

Finally, make sure you deal with an experienced business insurance professional.  Their expertise can help you pull together the coverage you want at the lowest possible cost.