Your business is the cornerstone of your livelihood, and protecting it from potential threats is a priority. Property insurance is one of the best ways to safeguard your company from unexpected risks like fire, water damage, and other calamities. Whether you own or lease a space, your business assets—including inventory, equipment, and documents—are essential to maintaining operations and securing your bottom line. This blog will cover the basics of property insurance and why it’s a smart investment for every business owner.
What is Property Insurance?
Property insurance protects your business’s physical assets from loss or damage due to events like fire, theft, storms, or vandalism. It can cover the building, furniture, equipment, and even valuable documents. For example, if a burst pipe damages critical business papers or a fire destroys your warehouse, property insurance steps in to help you recover and keep the business running.
Types of Property You Can Insure
Property insurance isn’t limited to just the building where your business operates. It can also cover:
- Office furniture, equipment, and supplies
- Inventory
- Cash, securities, and other financial assets
- Important documents, like legal papers or contracts
- Computers, machinery, and other specialized equipment
- Mobile equipment, such as construction tools
- Signs, fences, and outdoor structures
- Cargo and property in transit
- Business contingencies, like extra expenses and ordinary payroll during a loss
Types of Property Insurance Policies
The coverage you choose can vary depending on your specific business needs. Here are some common options:
Basic Property Insurance: Covers losses due to fire or lightning and costs related to moving property to avoid further damage.
Extended Perils: Includes protection from floods, earthquakes, windstorms, vandalism, explosions, riots, and even acts of terrorism.
Are You Fully Protected?
It’s crucial to ensure you have enough coverage to rebuild or repair your business in the event of a loss. Many policies offer either:
Replacement Cost Value: Covers the amount needed to rebuild your business without considering depreciation.
Actual Cash Value: Offers the value of the damaged property at the time of loss, factoring in depreciation.
Coinsurance Clauses
Most policies come with a coinsurance clause, meaning you’ll share the cost of covered services up to a certain percentage. This helps ensure you have full coverage for your losses. However, underinsuring your property could leave you responsible for part of the repair costs.
Conclusion
Property insurance is essential to protect your business from financial loss due to unexpected disasters. Taking an inventory of your assets and consulting with an insurance professional ensures you’re adequately covered. Protecting your property means protecting your livelihood.
For more information on how to safeguard your business, contact Garland-Sturges & Quirk today at (408) 227-9991.