Property Insurance Coverage

Property Insurance: The "Bricks And Mortar" Of Any Business Insurance

Property insurance (for small businesses as well as large ones) protects business property and inventory (assets) against physical loss or damage by theft, accident or other means - even if that property is removed from your place of business when it is lost or damaged. Property coverage for small business insurance can cover your costs to repair or replace what you've lost and, in some cases, compensate you for items that are physically irreplaceable. Because every business is vulnerable to property damage or loss at any time, this insurance is one of the first things you should buy when you start a business.

Property Insurance Overview

Property coverage in small business insurance can be structured several ways, and the premiums you pay are based on how comprehensive your business insurance coverage is.

If you don't own your building, you'll simply need contents coverage. In the most basic policies, property insurance for small business contents covers furniture, fixtures, inventory, office equipment and other supplies stored at your facility or off-premises. You may insure those items for replacement cost (which means you'll receive a settlement based on how much it will cost to replace the items at today's market prices) or for actual cash value (ACV), which pays only for the depreciated value of the property. While replacement cost small business insurance policies have higher premiums, they may help your business recover from a loss faster, since you can replace all of the lost or damaged property with new items. For this reason, most insurance professionals will recommend buying property coverage insurance for small businesses on a replacement value basis. Also, if you lease some of the equipment at your facility, your leaseholder may require that you insure the property at replacement value. However, if your business owns its own equipment and could easily purchase any equipment it might lose at the depreciated market value, the lower premium of an ACV policy might be a better value.