Are your business property and equipment adequately covered?
Adequately covering business equipment will help to repair or replace your damaged or destroyed equipment promptly after a loss.
Property values for insurance purposes may be figured on a replacement-cost or actual-cash-value basis. If you experience a loss, it is important to be back in business as soon as possible. During unexpected downtime you may lose customers if you are not available to handle their needs soon after suffering an insured loss.
An excellent way to keep up with adequate coverage amounts is to complete an annual inventory of the business equipment.
Leased equipment should be covered under your Business Property coverage unless specifically covered by the leasing company. Leased equipment should also be included in your business property inventory. If the property is mobile, Mobile Property coverage may be needed to properly cover equipment that is leased to a business.
Security measures should be considered especially when high value merchandise is displayed. Expensive items that can be easily taken from your business are often the targeted items. Having a concentration of valuable items located in one certain area can provide a would-be thief quick and easy access.
Upon purchasing equipment, the serial numbers of each item should be recorded and stored in a safe place. But, even with having completed a serial number inventory, it is common practice to have a security alarm installed to further protect the premises. Having the alarm company's shield visibly displayed can also help to deter thieves from taking what is not theirs.
Property of Others coverage is needed when the customer's property is in your business' care, custody, and control. This is in addition to the Business Personal Property amount that covers all stock and property owned by you and would include store fixtures (lights, cash registers, display counters and racks for stock, and other improvements and betterments to the insured premises).
Examples of businesses with a need for Property of Others coverage are those such as:
- Dry Cleaners/Alterations
- Business Machine Repair Shops
- Shoe Repair/Luggage Repair Shop
- Electronic Equipment Repair-Stereo & Appliances
Repair services or assembly of office equipment may require special underwriting considerations due to the nature of the liability insurance that is contained in the policy. A products and completed operations exposure may exist and it is important to address this exposure. Incidental repairs may not be subject to additional premiums, but the agent should be made aware of this exposure and additional questions should be answered to adequately rate and classify the policy.
Appraisals might be required where the insured property may have a specialty use or may be custom-built for a particular industry. High-value equipment may be best valued by using appraisals and indicating the suggested life of the equipment. Determining the replacement cost on non-appraised property can generally be done by contacting a manufacturer or distributor.
Surge and lightning protection devices are available for use when there is a concern about property damage as a result of fluctuating electrical current and/or lightning strikes. Properly installed electrical service meter surge protection devices (SPD) used in conjunction with individual plug-in SPDs offer a high level of protection for your building and business equipment. The electrical service meter SPD needs professional installation, while the individual plug-in SPDs you can install yourself.
Lightning protection systems provide a direct path for the lightning to follow to the ground, and also help to prevent property damage and destruction. A qualified contractor should install a lightning protection system. You may contact the Lightning Protection Institute for a list of qualified contractors.
Valuable papers coverage is available by endorsement and covers loss to valuable documents, including some computer software and data stored in electronic form. Your agent can suggest the endorsement that best fits your needs. The use of a fire-resistive or fireproof safe, as well as using back-up tapes stored off business premises to protect these valuable documents should be discussed with your agent.
