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Every business owns property. Even if you don’t have any staff or don’t have a physical office, at the very least, you will still have equipment needed to operate the business and maybe even some products to sell.
Businesses spend a lot of money on tangible assets like inventory or in machinery and automation. Without contents insurance, you would have to pay out of pocket to repair or replace any damaged equipment. This could negatively impact your finances and any delays can be disruptive to your business operations.
All business owners should ensure they have contents insurance in place to protect their investment.
The definition of stock also includes ancillary things like packaging or advertising materials.
What does Contents Insurance cover?
Commercial property insurance can be broken down into two main coverages: buildings and contents. The building coverage is pretty straight forward but contents coverage consists of the business’ stock and equipment.
Stock is defined as any merchandise usual to the business; this includes everything that is usually sold by your type of business. For example, if you purchased insurance for a grocery store, you would have coverage for all things typically sold in grocery stores: fresh produce, packaged goods, meats, etc. Following this logic, you would not have coverage if you also sell things like computers or power tools.
The definition of stock also includes ancillary things like packaging or advertising materials as well as the property of others if they’re similar to your own. As an example, if you ran a watch boutique, packaging and advertising materials would include any gift bags or yers that you would hand out with every sale. Customers might also send you their watches for repairs or servicing. Customer property in your custody would be insured under the stock category.
The second class of contents is equipment. Similar to stock, equipment includes all equipment that is usual to your type of business, property of others if it’s similar to your own and any renovations or improvements you’ve made to a rented premise. A dental office would have coverage for computers, printers, x-ray machines and other medical devices. Coverage for usual equipment is available regardless of whether it’s leased or owned outright.
What types of Contents Insurance can I choose from?
You have the option to choose from Named Perils or All Risk (Broad Form) options. With Named Perils, the policy will only cover contents damaged by the perils listed on the policy (i.e. re, lighting, explosion or leakage from re protective equipment). But if you can afford it, All Risk is a better option, as it protects your contents from all perils not specifically excluded by your policy (i.e. theft).
That being said, if you have special exposures or contents like computer servers, boilers, pressure vessels or other machinery, speak with your broker. You might need to purchase additional policies like Electronic Data Processing (EDP) insurance, an Equipment Breakdown policy or different oaters for insuring tools and equipment frequently used on premises.
Coverage will also vary depending on your industry.
How much Contents Insurance do I need?
To figure out how much Contents insurance you need, it helps to work with your broker to complete an inventory of your stock and equipment. Go through your office(s) room by room and make a list of all of your business property, collect receipts and invoices to figure out how much it would cost to replace all of this property with new ones of like kind and quality.
The goal of this exercise is to make sure you choose a limit large enough to re-open after a disaster.
Apply for contents insurance from Apollo today and find out how much you can save.