The insurance you need for your assets depends on the kind of property you’re protecting and its value. You can take out coverage for everything from buildings and equipment to machinery repairs and lost revenue. But make sure you don’t over-insure by keeping a detailed list of your assets and reassessing your needs at least once a year.
Business assets insurance is a package of insurance that covers physical goods and resources your business owns. The term doesn’t refer to any one specific type of insurance, and the insurance you need may depend on your business or industry.
Some coverage may be required, such as commercial property insurance if you’re financing your company’s office.
What insurance protect business assets?
Your business might need an assortment of insurance to protect different assets and situations. Here are options to consider:
Commercial propertyinsurance can protect your business’s buildings and office tools, equipment and stock. It covers damage from events like storms, earthquakes, lightning, explosions or theft.
Flooding or earthquake insurance adds extra business property protection for flooding or earthquakes that don’t come standard with commercial property insurance.
Commercial car insurance protects against collisions, storms, fire or theft of your business vehicles, depending on the coverage you choose. You’re also required to buy liability coverage to protect damage you cause to other people or vehicles.
Machinery breakdowninsurance offers protection when mechanical and electrical equipment your business uses needs repairs or replacement.
Business interruptioninsurance offers income protection if your business suffers damage from the risks listed under commercial property insurance. During temporary closings or reduced business hours, your company will still need to manage ongoing expenses like rent and utilities.
Fidelity bonds or commercial crime insurance protects your business from fraudulent or dishonest acts committed by employees. Your coverage includes stolen money, equipment or goods your business is responsible for.
Cyber liability helps your company regain important information lost, damaged or stolen from your computer systems. It also helps restore networks damaged in the process.
How do I compare business assets insurance?
Buying the right insurance for business assets comes down to those assets’ value to your business. That includes their market value and the value they create through revenue.
The value of your assets. You can total the amount your assets are worth and opt for enough coverage to protect that value. Consider that you may not get reimbursed for the full value of replacing that asset. Instead, you may need to calculate the depreciated value based on that asset’s age and wear.
Risks involved with your business. The types of property insurance you need depends on how your business runs and how much risk is involved. For example, you may need inland marine coverage for vehicle insurance if you transport equipment or customers’ goods. But you might choose to forgo machinery breakdown insurance if you don’t use equipment regularly or can handle repairs on your own.
The impact of the damage. Think through the repercussions if different assets become unusable even for a short time. You may need insurance to keep business running smoothly plus a game plan for reducing the impact.
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What affects the cost of insurance for business assets?
Insurance providers take a number of factors into account when calculating your premiums. This process involves determining the risks your business faces and the likelihood of dealing with a claim. Factors an insurer looks at:
Your claims history — If you show a history of reporting property damage, you’re may seem at risk for future claims.
The dollar amount you choose for coverage — You might pay more to cover top-dollar assets or for your items’ full replacement.
Where your business is located — Different kinds of property damage like storms, theft or car accidents happen more often in certain areas.
Thesafety of construction material — The materials used in your buildings can determine their level of durability.
The risks for the industry you work in — This can include risks specific to your business, such as the high risk of equipment damage for corporate builders.
Any security measures you have in place — Alarm systems or dedicated security could lower your premiums.
What exclusions should I watch out for?
Policies that cover business assets may add important exclusions, although these can differ from one policy to the next. Typical exclusions to watch for:
Any claims related to war, terrorism or nuclear damage
Deliberate damage the company or business owner commits
Damage caused by manufacturing defects
Damage incidents not named in your insurance policy
Legal liability for damage you cause to other people and their property
Physical property during travel or in storage, unless your policy specifies these
Police officers or legal officials seizing property
Wear and tear, unless you’re covered by equipment breakdown insurance
How do I document my business assets?
It’s important to keep a detailed inventory of your business’s assets and their value. Follow these steps to help you determine your property’s value for both business taxes and insurance purposes:
Create a list or spreadsheet of your business’s assets.
Document the item’s year, brand, model numbers and date of purchase.
Keep the physical receipt or photograph the receipt to prove your purchase, if possible.
Get an appraisal for valuable equipment or items that appreciate in value.
Video or snap photos of your assets for further proof that your business owns these items.
Make multiple copies of your inventory for safe-keeping.
Update your assets list at least once a year to raise or lower your coverage.
Compare business asset insurance
Insuring your company’s assets can offer much-needed financial protection for resources your company uses to bring in revenue. You’ll need to consider the types of property damage you’re most likely to face, your property’s value and how damage could affect your business. That way you can buy the business insurance coverage that best protects your property.
Common questions about insurance for business assets
You can insure a wide variety of physical assets for your business, including:
Computer data, including stored customer information
Manufacturing or construction machinery
Monetary funds or cash on hand
Office desks, chairs and computers
Restaurant cookware, utensils, commercial stoves and dishwashers
Vehicles — Cars, vans, freight trucks, trailers, ships or planes
Video camera and lighting equipment
No, umbrella insurance doesn’t cover expenses to repair or replace your business property. It provides extra coverage for your business’s liability like general, public, professional or vehicle liability.
Hazard insurance is a term that means insuring against different types of events or weather. Also referred to as perils, many hazards are covered under your commercial property insurance. You can buy coverage for specific hazards not included under property insurance like earthquakes and flooding.
Richard Laycock is Finder’s insights editor after spending the last five years writing and editing articles about insurance. His musings can be found across the web including on MoneyMag, Yahoo Finance and Travel Weekly. When he’s not doing deep dives on data, he is testing the quality of cocktails in his newfound home of New York. Richard studied Media at Macquarie University and The Missouri School of Journalism and has a Tier 1 Certification in General Advice for Life Insurance.
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