Small Business Insurance: Property

Property insurance allows you to protect the assets of your business, and reduce the risk of losing the key parts of your operation and equipment in the case of an unforeseen disaster. Some types of property insurance also proved coverage for theft and accidents, and your final choice or package will depend on the location of your business for safety. As you juggle the different insurance packages and options for your small business, it's important to understand how to prioritize your needs.

What does property insurance cover?

Property insurance is designed to cover the following main areas:

• Explosions
• Accidents
• Theft
• Fire damage
• Water damage
• Acts of nature
• Vandalism
• Sprinkler leaks
• Storm damage

What specifically is covered?

The key items of coverage for your small business will include:

• Fixtures and carpeting
• Personal property kept on the premises
• Office furniture
• Equipment and machinery

Are there additional options?

Some property insurance carriers also offer the following protection plans:

• Data protection including computer virus protection
• Undamaged stock protection
• Intangible coverage, including trademarks and copyright
• Off-premises protection

In some cases, property insurance may also cover work-related damage; for example, if a machine in your factory fails and causes damage to other equipment, you may be covered for damages. Every case is different, and it's important to understand what specifically you have covered under your plan.

The first step in finding out what your small business needs is to take inventory. List all of your supplies, inventory, equipment, and other property so that you have a comprehensive list of what the business owns. From there, it will be easier to organize what needs to be covered, and what can go without. Be sure to include all stock equipment that may be in storage; you can obtain property insurance to cover this area in case of fire or water damage as well.

Keep in mind that location is the largest factor in determining the cost and overall coverage needed for your small business. If you require extra security because you are situated in a high crime area, it's likely that you'll need comprehensive theft insurance. However, if you can enforce your own security measures or program, your insurance costs will be much lower.

If you' are running a home-based business, you will still need basic property insurance to cover inventory in case of damage. It will be much easier for you to get the business back up to speed after a flood or fire with the right plan. Do keep in mind that even though property insurance is not mandatory for a small business, it will help you cover the company's important assets-it's especially important if you are managing inventory. If your business has some unique risks to manage, you will want to explore comprehensive and special policies; even though these are more expensive, you'll have the confidence that you're well-protected.

The costs of reclaiming your business inventory after damage, or simply renovating after an accident, can be extensive if you are not property insured or covered. Small business property insurance is a necessary step when you are setting up your company, and you may need to increase the premium based on specific needs. Prioritizing what your business needs will help you determine which insurance coverage plan works best for you.