The specificity offered by business contents insurance is paramount in the world of commercial insurance. As its title alludes, this coverage insures the contents of a business (as opposed to premises insurance which insures the physical structure of the building itself), and is a life saver when theft, natural disaster, fire, and water damages occur. It is essentially a type of personal property insurance especially designated for businesses, and even if you are operating from a home based business, you will benefit greatly from this coverage.
While the premise is simple, understanding what types exist, how much to get, and which is best for you is not. Compare business insurance quotes – Fast, Free, and Online!
Business Contents Insurance in Relation to Commercial Insurance
There are four types of commercial insurance. They are:
Business Contents Insurance in Relation to all Commercial Services
- Business Liability
- Business Auto
- Workers Compensation
- Business Property
This coverage, along with premises insurance, falls under the umbrella of business property insurance. The contents of a business are the moveable things inside the business that can be readily damaged or stolen. The value of an item in the case of a claim can either be for the replacement cost with no regard to depreciation, or for the depreciated cash value, also known as the indemnity value.
Checklist of Items That Can and Should Be Covered by Contents Insurance
Before seeking this coverage, detailed documentation should be gathered or created regarding the costs and values of all contents belonging to the business. This is a brief checklist of many of the items that can be protected.
- Office Equipment: Desks, Chairs, Phone System, Desktop Computers and Laptop Computers, Printers, Copiers, Security System, Fax Machine, Digital Camera, Internet Connection Hardware, Book Cases, and any other furniture.
- Manufacturing Equipment: These are the machines and tools used to manufacture a business’s product.
- Inventory: Items that are being stored. These include for sale products or stores of supplies that are used to create a product. Some companies look at daily averages while others look at yearly peak inventory numbers.
Points of Possible Confusion
One of the biggest pitfalls or points of confusion regarding insurance for business contents is ascertaining the value of specialty equipment and tools, inventory that is rare or one of a kind, as well as understanding the monetary value of recreating research, records, and intellectual property in the case they’ve been destroyed and need to be recreated from scratch.
Valuable papers insurance is a solution to some of these issues, but realistically insuring to an accurate level or cost may present challenges that only experience can truly answer.
That said, another important aspect of business content insurance is interruption coverage.
Compare business insurance quotes – Fast, Free, and Online!
Business Interruption Insurance
When a business suffers from an accident or theft of some sort and cannot continue operating at the same level of production as before the incident, then the resulting loses of profit can be covered by business interruption insurance or business income coverage.
An in depth history of financial records is necessary to establish the benefits that would be paid in such a circumstance, and this insurance even covers operating expenses that continue regardless of the state of the business. A cousin of business interruption insurance is extra expense insurance which kicks in during the rebuilding, recreating, or restoration time following the disaster.
Overview
Hopefully this explanation on insuring the contents of your business has helped to give you a working knowledge of what this insurance is and what it covers. The best advice of course should come from a certified insurance professional, but one truth is that having this type of insurance will help any business and business owner worry just a bit less about losing time, equipment and tools, and money from disaster and theft. Please do not leave anything to chance as it is your livelihood, and the livelihood of those who depend on you that is at stake.