Property Insurance For Small Business

Property insurance is a key aspect of every small business. In small business, there are unpredictable situation that can increase risks. Think of your property insurance as the glue that keeps your small business together. . Without protection from these risks, your small business falls apart. Property insurance can give you the protection you need against these small business perils.

Property insurance for small business is different from home property insurance. Because small business is unique, you will have to design your own property insurance package. To meet the protection needs of your small business, your property insurance policy must be customized to cover all aspects of your small business.

Most property insurance policies for small business cover three general areas: property/contents, professional liability, and business interruption.

Small Business Property Insurance – Property/Content Coverage

You should consider purchasing a policy that will protect your own building or business, including office equipment, computers, inventory or tools, and if  you have a fire, vandalism, theft, smoke damage etc.  You may also want to consider business interruption/loss of earning insurance as part of the policy to protect your earnings if the business is unable to operate. 

Small Business Property Insurance – Liability Coverage

Every business, even if home-based, needs to have liability coverage.  Liability coverage in your small business property insurance policy is something that you can’t do without. The purpose of this small business property insurance aspect is to offer protection both defense and damages if you, your employees or your products or services cause or are alleged to have caused Bodily Injury or Property Damage to a third party. Simply put, the liability clause in your small business property insurance policy protects you from being sued. This aspect of small business property insurance pays for your legal fees in case of a lawsuit. 

Professional liability is another liability coverage you need for your small business property insurance, especially if you’re a professional, such as a doctor, architect, computer consultant, or a realtor. This type of small business property insurance protects you from damages resulting from error or omissions on your part.

Small Business Property Insurance – Business Interruption Coverage

Business interruption insurance (also known as business income insurance) is a type of insurance that covers the loss of income. It differs from property insurance. The property insurance policy only covers the physical damage to the business, while in the business interruption policy covers the profits that would have been earned. This extra policy provision is applicable to all types of businesses, as it is designed to put a business in the same financial position it would have been in if no loss had occurred. This type of coverage is not sold in package policy, but can be added onto the business’ property insurance policy or comprehensive package policy such as a business owner’s policy (BOP).