When it comes to owning and operating a business, protecting your property and its contents is a top priority. Many insurance companies offer different types of coverage to help protect valuable assets should an unexpected event occur. Despite this, however, insurers will only cover certain items that have been damaged due to a covered event. Taking into account what is considered business personal property before any damage occurs can be advantageous for business owners.
Business Personal Property
Similar to a person or family, a business can have personal property that needs protection through an insurance policy. However, the types of property that a business owns are different from those of an individual. Business personal property consists of items that are moveable and not affixed to or associated with the land. Purchasing personal property for a business and insuring it is a tax-deductible business expense.
Business personal property can also be considered tangible or intangible. Tangible personal property can be felt or touched. Generally, this includes the furniture, equipment, vehicles, and other valuable physical items within the business and on its premises. Intangible personal property cannot be felt or touched and can include securities, bonds, and/or a business’s intellectual property. These items are considered personal property because they can be bought, sold, and/or licensed.
Not all business personal property can be insured under a commercial policy. In most cases, business owners will need to purchase multiple policies to ensure adequate coverage. The most common covered business personal property items a business has would include:
- Office supplies
- Furniture and furnishings
- Computers and electronics
- Heavy equipment
For a business’s personal property to be covered under an insurance policy, it must be located at the property at all times. In the event it leaves the commercial space, the owner may need to purchase additional coverage. This is particularly true for company-owned vehicles, which are not considered business personal property and must be covered under a commercial auto policy.
For the home-based business models that have become quite popular in recent years, there are certain stipulations regarding what is considered business personal property. For instance, homeowners’ insurance will not cover any business-related losses or business equipment and technology. Home-based business owners will likely need to purchase multiple insurance policies to ensure their operations are properly protected.
Business Personal Property and Commercial Property Insurance
Business personal property is covered within a business owner’s policy (BOP) under commercial property insurance. This specific coverage helps to protect any owned or rented the property at the company from a natural disaster, fire, theft, or vandalism.
Purchasing the right amount of coverage under a commercial property policy can be daunting if a business owner does not know just how much of their business personal property should be insured. Creating and maintaining an up-to-date inventory of all the assets owned by the business can help owners quantify exactly what they have to best determine the amount of coverage needed. Having an accurate inventory of all business items can help commercial property owners estimate the net worth of the property.
In most instances, there are three types of commercial property damage policies that can be purchased to offer protection against varying causes of damage or loss, such as:
- Basic form policies: Provide the least amount of coverage for damage caused by fire, windstorms, hail, lightning, explosions, smoke, vandalism, sprinkler leakage, riots and civil commotion, and sinkholes.
- Broad form policies: Provide coverage for losses included in basic form policies, as well as damage from leaking appliances, structural collapses, falling objects, and ice, sleet, and/or snow.
- Special form policies: Provide the most coverage for a commercial property. This includes insuring against damage from all causes of loss except those specifically excluded in the policy. Most policies exclude damage caused by floods, earth movement, war, nuclear disaster, wear and tear, and insects or pests.
Insurance Coverage Attorneys
Obtaining proper insurance coverage for all business assets is incredibly important for owners to have well before opening their doors. While having insurance coverage can be incredibly helpful when faced with the aftermath of a disaster, insurers often try not to timely pay valid claims. When this happens, obtaining legal counsel experienced in bad faith claims is crucial. The insurance coverage attorneys at Raizner Slania have successfully held some of the largest insurance companies in the world accountable for undervaluing, delaying, and denying valid commercial property damage claims. If you need assistance with an insurance claim, we can help. Contact our office today to see how we can best assist you.