Business personal property (BPP) insurance offers financial protection for the repair or replacement of your lost, damaged, or stolen business property. It covers things like computers, furniture, and inventories.
If you own or rent your workspace, business personal property insurance (also known as business contents insurance) is included as part of your commercial property insurance. If you run your business out of your home, the items you use to run your business probably wouldn’t be covered by your homeowner’s insurance because they’re considered business property.
Business personal property, also known as business contents, includes the things you need to run your business.
Look around your business space and you’ll see the items that we’re referring to, as it includes almost everything but the building itself. Then, take a moment to consider how expensive it would be to replace these contents.
Your asset list of business personal property includes:
For tax purposes, BPP insurance is a tax-deductible business expense, so it makes sense for small business owners to protect their tangible property with this coverage as the premiums can help reduce your tax bill.
Business personal property insurance covers your real property, known as tangible assets, but not your intangible assets.
Your tangible assets are things you can physically see or touch, such as a desk or computer. For these assets, their value is easily defined and can be covered by a business personal property policy.
Intangible property includes things like trademarks or patents your business may own. Such intellectual property might also have value to your business, but they’re not covered by business property insurance, and their market value is much harder to determine.
You can insure your tangible business property for its actual cash value or the replacement value. The actual cash value refers to how much the item is worth.
If you filed a claim on a computer that was insured for its actual cash value, the insurance company’s valuation of the item would consider the price of buying the same type of computer, how old it is, how much useful life it had, and deduct the amount of depreciation to produce an assessed value for your claim.
If your computer was insured for its replacement value, the insurance company would cover the cost of buying a brand-new replacement.
Claims based on replacement value are going to be more costly for the insurance company, so this type of coverage has higher premiums than insuring items for their actual cash value.
Your cost is based on a few factors, including:
Business personal property insurance costs an average of $63 per month. This is based on the median cost of policies. And 16% of Insureon’s small business customers pay less than $42 per month for their policies.
Any business with tangible assets should consider business personal property insurance, especially if a loss of property would have a significant impact on its bottom line.
Retail stores are a most obvious example of businesses that would benefit from business personal property insurance. A theft or fire that destroys inventory and equipment could put a hardware store, electronics store, or similar shop out of business.
Beauty and hair salons can have expensive equipment and products that would put the owner in a bind if she had to replace these items out of her own pocket. Likewise, consider the kind of loss a restaurant would suffer if it had to replace its tables, commercial ovens, and other items.
While property insurance can provide protection for your business personal property, other common business risks, such as injuries to customers on your property, will require different types of insurance coverage. Here's a short list of policies that may benefit your small business based on your industry, location, and unique needs.
While BPP insurance covers items kept at your place of business, it does not include your business property while it’s in overland transit or stored at an off-site location. For this you would need inland marine insurance. It’s known as a “floater” policy because your coverage follows wherever your property goes.
Your property insurance also doesn’t include any business-owned vehicles you may have. For this you would need commercial auto insurance, which covers property damage, legal bills, and medical expenses if one of your vehicles is involved in an accident.
You might also consider business interruption insurance, which covers lost revenues and related expenses if your business has to close because of a catastrophic event, such as a fire.
For many small business owners, general liability insurance is often the first insurance they buy. It covers common business risks like customer injury, customer property damage, and advertising injury. It’s often required by landlords and customers to lease a property and sign contracts.
A business owner's policy (BOP) bundles both general liability insurance and commercial property insurance, and may cost less than if you bought each of these policies separately. Together, they provide property and liability coverage for your small business.
Intellectual property, such as trademarks or patents your business may own, are not covered by business personal property insurance. Small businesses that are looking for this protection, such as publishers or media and advertising businesses, would need to look into media liability insurance or cyber liability insurance.
Are you ready to safeguard your business with commercial property insurance or another policy? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.