Also referred to as ‘Contents Coverage’
For most business owners Business Personal Property Insurance is one of the most overlooked coverage options out there, in my opinion. Often times when I ask potential insureds if they want this coverage they quickly say NO I just need general liability. This may be ok for a few segments of business, but overall this is actually a really important coverage that doesn’t cost much more. What most business owners do not realize is that around 60% of companies that do not carry this coverage, do not reopen after a catastrophic loss. What exactly is Business Personal Property Insurance Coverage you ask? Business Personal Property Insurance (Contents Coverage) provides coverage for furniture, fixtures, merchandise, materials and all other personal property owned by you and used in your business. Coverage is generally at replacement cost. Now try to envision what this means to your business. If you are a contractor and have a shop that houses all of your tools, unscheduled equipment, etc. A loss wipes out your shop whether it was from fire or something else. Most of your tools and other items are now not usable. What do you think the cost of replacing those are without insurance coverage? This number will vary depending on the size of your company but when you start buying or adding up the value of everything you had this number escalates pretty quickly. If you had this coverage you probably have a $500 deductible but that will pale in comparison to the actual cost of replacing everything you need to function like the day right before your loss.
Examples of the need for Business Personal Property Insurance
Lets take a look at a different type of business and show the importance of Business Personal Property Insurance Coverage. Take a restaurant for example. Lets say you open a restaurant. You are new and business is slow at first. Money is tight due to all of the start up cost associated with getting a business off of the ground. With buying insurance for possibly the first time quite a few owners are caught off guard by this cost> they may want the bare minimum to get coverage in place to satisfy a lease, etc. Only give me general liability is what they will tell us. Its the only thing that is being requested from my landlord or lease. We recommend additional coverage that is vital in this type of operation and that is furniture, fixtures, kitchen equipment, etc. They decided well I will just add that later. Business owners are very busy especially at the start up phase and they continue to say lets just wait or I don’t have time to deal with it right now. That is a valid point, but imagine if they are four months in and they have a fire that wipes out their restaurant. They only have liability coverage. All of a sudden the dream they had of owning their own business is suddenly snatched away from them. When you way the cost of having to replace everything out of pocket to get back open, it can be crippling to your business.
The cost of this coverage varies with the amount you need to cover. For restaurants specifically, carriers often have a section where they can put the vast majority of the amount you value into a section called restaurant equipment. This is rated better than just blanket business personal property coverage and will make this coverage even that much more affordable.
At the end of the day at least get this coverage priced along with your general liability. That way you can make an educated decision on whether you want to further protect your business. It is after all your lifelong dream of being a business owner. Do you really feel like rolling the dice with your dreams.