Imagine you get a call in the middle of the night from the fire department because the building your business occupies is on fire. You rush there to find out that all of your business assets have been destroyed in the fire. What do you need to purchase immediately to resume business operations? How much will it cost to replace the items needed to operate your business? What impact will it have on your business if you don't have BPP insurance to cover the cost of the assets that were destroyed?
Not having Business Personal Property Insurance (BPP) has put companies out of business when they can't recover profitably from a tragedy like this.
What It Is, What it covers, Who Needs It
Business personal property insurance covers tangible items your business owns, uses or rents within your building – but not the building itself.
Business personal property insurance (BPP) insurance, can pay to help you repair or replace items your business owns, including equipment, furniture and inventory, up to the limit of your policy.
What does BPP insurance cover?
BPP insurance covers repairing or replacing business personal property that is damaged by a covered cause of loss.
This can cover the costs to repair or replace:
- Inventory: stored at your office or warehouse
- Furniture: desks, chairs and conference tables
- Furnishings: rugs, blinds, and carpets
- Machinery and equipment
- Computers and electronics
- Office supplies
- Property you’ve leased from another party that you’re required to insure
- Upgrades: Improvements you’ve made to a leased space as a tenant
- Personal Property: others personal property that is temporarily stored in the building
What is a Covered Cause of Loss?
BPP insurance covers replacing or repairing business personal property in case of:
- Fire
- Lightning
- Explosion
- Windstorm or hail
- Smoke
- Aircraft
- Vehicles
- Vandalism
- Riots
- Sprinkler leakage
- Sinkhole collapse
- Volcanic activity
Some business property insurance policies may also cover:
- Falling objects
- Water damage
- Collapse
- The weight of snow, ice or sleet
What BPP Doesn't Cover?
Most policies exclude certain causes of loss like floods and earthquakes. In most cases you will need a separate flood policy. It’s always a good idea to go over your policy to understand what it covers and what is excluded.
Remember that BPP covers moveable property; it won't protect the building that you lease or own; you will need a separate property insurance policy for the building. BPP won't cover intangible items your business owns, which includes intellectual property like trademarks, ideas, patents, copyrights and more.
Why Is BPP Insurance Important?
Businesses need inventory, equipment and other business-related items to operate. If an unexpected accident or covered event happens, BPP can help your business recover.
It keeps your business running
BPP allows your business to keep running, even if your business gets vandalized or a pipe burst destroys your inventory. Without being properly covered, business personal property losses can easily cause your business to fail. By insuring your business, you can get crucial financial assistance in the event of a covered loss, so your business can keep running as smoothly as possible.
It saves you money
When a critical piece of property in your business is damaged or stolen, your business could potentially come to a halt until it is repaired or replaced. Without BPP, you would need to pay out of pocket to replace inventory or equipment. You could even potentially lose clients if your business has to shut down temporarily. Plus, just as personal property is a tax-deductible business expense, so is BPP insurance. To capitalize on this tax deduction, make sure to keep detailed financial records to provide to the IRS.
FAQs
Who needs business property insurance?
Any business with tangible assets should have business personal property insurance, especially if your business could be significantly impacted in the event of a loss of property.
Is Business Income included in BPP?
Business income is included when you buy business personal property insurance. It can cover lost income if your business needs to temporarily close due to being lost or damaged by an unexpected covered event, like a fire or theft.
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