You put your heart and soul into your business, so you would probably do whatever you can to protect it. An easy way to start is by purchasing property insurance for your business. Whether you own a small construction business or a large phone company, property insurance for business is essential.
Shopping for business property insurance may seem daunting, but it doesn’t have to be. Here’s a quick guide to help you understand what property insurance for business is and why you need it.
What is business property insurance and how does it work?
This type of insurance could provide critical financial assistance and protect your company’s valuable assets from unexpected events ranging from severe weather to theft. Property insurance for businesses could aid in continuing business operations as usual. Business property insurance covers the building you do business in, the contents of those buildings and loss of income if you’re out of business due to a claim.
Assess the risks your business faces
Some operations are at a higher risk for a property loss than others. A restaurant with commercial cooking that produces grease-laden vapors has a higher risk for a fire to occur and damage their property than an office exposure. A woodworking operation also presents a different set of property risk exposures than a landscaping contractor’s workshop. Other factors also play into the size of a property claim, such as protection class (distance from fire department and available water sources), building construction type, and external exposures that surround the location’s property.
Location and size
Businesses with multiple locations may have higher premiums than businesses with one location. Local risks could play a role as well. Businesses in areas with a higher crime rate might see higher premiums than businesses in areas of lower crime rates. The size of your business is a factor as well. For example, a large house painting company with a warehouse full of equipment—paint, ladders and lifts, pressure washers, brushes, rollers and more—could have a higher premium than a three-person startup company with little to no equipment. In general, more assets to protect can mean higher premiums.
There are a few things you can do to decrease the cost of your premium. To start, be serious about safety. Relevant safety measures may include having up-to-code fire extinguishers, a commercial fire alarm system, routine building maintenance, a central station alarm system, door and window locks and a lock-up policy. It’s also good practice to reevaluate these risks every year or as often as your insurance agency deems it appropriate.
Determine the value of your assets
If you have large equipment that needs to be transported from job site to job site, or have an office full of products, technology, furniture and even décor, you’ll want to make sure you have enough insurance coverage to protect these items in case of a large loss. Such losses could be caused by hurricanes, tornadoes, theft, fire and more.
First, you should understand the difference between Actual Cash Value (ACV) and Replacement Cost.
ACV refers to the cost of replacing or repairing items that are accidentally damaged, destroyed or stolen. This excludes normal depreciation or wear and tear of the item. A simple equation to remember your items’ ACV is:
Cost Brand New – Depreciation = ACV
Replacement Cost is similar to ACV only it could replace or repair items at their original value and doesn’t take depreciation into account. An equation to remember Replacement Cost is:
Cost Brand New = Replacement Cost
Understanding and accurately evaluating the Replacement Cost of your items could save you from a coinsurance penalty if you underreport the value of your items.
You work hard to build your business. You invest in people and resources to keep it running smoothly. Make sure you have enough insurance to protect it by talking to your independent Integrity agent.
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Ask for help to get the right business property insurance
You don’t have to do this by yourself. Ask your local, independent agent about expanding your coverage to include business property insurance. We make the process of purchasing property insurance for your business easy.
Our premium audit assists our agents to help them understand your business needs to ensure a fair and accurate price. In addition, we’re equipped with a full risk control team who have the knowledge and expertise to help you minimize risks.
Speak to an independent Integrity agent
Starting a business is exciting and scary at the same time. Your local independent Integrity agent wants to help you purchase the right policy with the right coverage. Find an agent today and protect everything you worked so hard to build.
Coverages described herein may not be available in all states. Please contact one of our local independent agents for complete details on coverages and discounts. If the policy coverage descriptions herein conflict with the language in the policy, the language in the policy applies. The material provided above is for informational, educational and/or suggestion purposes only, and does not imply coverage. WE RESERVE THE RIGHT TO REFUSE TO QUOTE ANY INDIVIDUAL PREMIUM RATE FOR THE INSURANCE HEREIN ADVERTISED. Applicable policies may be underwritten by Grange Insurance Company, Trustgard Insurance Company, Grange Indemnity Insurance Company, Grange Insurance Company of Michigan* and Grange Property & Casualty Insurance Company*, Integrity Insurance Company*, Integrity Property & Casualty Insurance Company*, Integrity Select Insurance Company*. *Not licensed in Pennsylvania
Insurance Information Institute
U.S. Small Business Administration