If it were called Business Property not Business Personal Property, I probably wouldn't even need to write this blog post. Essentially, that's what it is, though. It covers loss or damage to property owned by the insured and used in the course of business. This might be furniture and fixtures, equipment, inventory or machinery. Defining the coverage is the easiest part, explaining the coverage is where it can get confusing. Below are some tips when looking at Business Personal Property.
The first thing to look at is your coverage amount, also known as coverage limit. This limit can change, so it's extremely important to review it. Some insurance carriers know some business owners don't review it, so they put an endorsement on the policy to automatically increase the coverage. You can find you Business Personal Property (BPP) Limit on the Declarations Page of your policy. Also look at your deductible as you don't want there to be any surprises when you have to file a claim.
Secondly, It's important to look at the policy form. There are three forms, "Basic", "Broad" and "Special". "Special" form is going to offer the broadest coverage. However, as with any insurance policy, you have to look at Exclusions and Property Not Covered. An example of an exclusion that comes up a lot is Flood. Flood Insurance is a separate policy and cannot be added as an endorsement.
Lastly, you have to know if your Business Personal Property is covered at "Replacement Cost" or "Actual Cash Value". Both sound good, but one is definitely preferred over the other. Simply put, Actual Cash Value factors in depreciation and Replacement Cost does not (Replacement Cost- Depreciation= Actual Cash Value). For more details on this see this blog post.
These are just a few simple tips when looking at Business Personal Property. If you have any questions, or need help understanding your policy, please feel free to contact me.
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