Expert Advice
A Risk Management Guide for Marketing and Management Consultants

Chapter 2: Understanding Small Business Insurance for Independent Consultants
Part 2: Basic Insurance Policies for Sole Proprietors & Independent Contractors
Property Insurance

Property Insurance shields your business from the high price of property loss or damage. Your Property policy can typically cover claims caused by…

  • Fires.
  • Thefts.
  • Windstorms.
  • Power outages.

Hurricanes, flooding, and earthquakes are usually excluded by standard policies, but you may be able to add specialty coverage (called "endorsements") for event-specific protection.

40 percent of small businesses never reopen after a natural disaster.

When your office and equipment have been destroyed, you miss out on opportunities to serve your clients, generate revenue, and grow your business. And you don't want your business to be among the 40 percent of small businesses that never reopen after a natural disaster. That's why you'll want to purchase Commercial Property Insurance if you…

  • Operate a home-based office. Just as your Homeowner's Insurance doesn't cover business liabilities, most polices don't cover loss or damage to commercial assets. Some may not even cover your home office. Considering that home-based entrepreneurs typically dedicate 250 square feet of their home to their business, that's a considerable amount of property to leave unprotected. Certain endorsements can extend your Homeowner's policy to protect your commercial gear, but you'll receive more coverage with a standalone Commercial Property policy. To learn more about what your Homeowner's policy does and doesn't cover, check out our infographic "Is Your Home-Based Business Covered? New browser window icon."
  • Own commercial real estate. If you own commercial real estate, you have plenty of incentive to protect your investment, especially because you're responsible for repairs and replacements. When you have adequate Property Insurance, the cost of repairing your building and replacing its contents after a covered event doesn't have to come from your pocket. Equipment, furnishings, tools, and your building's structure can all be covered by your policy.
  • Rent an office or building. Your landlord may have their property protected under a personal policy, but it's important to check your lease to be sure. Even if the building is covered, you are likely responsible for replacing the furnishings, fixtures, and your equipment. If that's the case, make sure you look for a plan that protects your gear without charging you for building coverage.
  • Own expensive equipment. As a consultant, you probably rely mostly on your electronic devices to serve your clients. However, electronics can easily be sabotaged by one unexpected power surge. Laptops, smartphones, tablets, and desktop computers are also the target of many robberies. Adequate Property Insurance can spare you the expense of replacing your media devices after they're lost or damaged by a covered event. When choosing your plan, consider whether it's more cost-effective to purchase replacement value or actual-cash value coverage. Replacement value coverage costs more, but it also offers you the amount your items are worth if you buy them new. Actual-cash value coverage costs less, but it only compensates you for the depreciated value of your items.

When taking inventory of your assets and deciding what to cover with your Property policy, be thorough and ensure your limits allow for breathing room. You can never be too careful when it comes to safeguarding the future of your consultancy business.

Home-based businesses typically dedicate 250 square feet of space to their business.

Next: Business Owner's Policy

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