In general, people tend to be under insured. This means that if they experience a loss to their business they would not have adequate coverage to replace or rebuild their business to the state it was in before the loss occurred. The process of protecting your business correctly takes more than looking for the lowest price. Having a professional agent who knows the needs of your business and can help you create a protection plan is vitally important to your business’s success.
Check out these 4 Simple Coverages That Are Vital For Your Business
How is property valued?
On most insurance forms, coverage is either valued on a replacement cost basis or an actual cash value basis. What does this mean? Replacement cost is defined as the cost to replace the property with materials of like kind and quality. Actual cash value is the replacement cost less actual physical depreciation.
The coverage limit on your policy is the maximum amount to be paid by your insurance company in the event of a loss.
Selecting an appropriate limit of coverage for your building is relatively straightforward. Building Coverage is defined as the cost to rebuild your business’s structure. This typically includes the structure as well as completed additions, fixtures, permanently installed machinery and equipment, and personal property that are used to maintain or service the building. To determine this, insurance companies look at features such as square footage, building construction, foundation type and updates to the roof, electrical systems, etc.
If you are a landlord and you are getting coverage for a business building that you rent out, you must also address the issue of tenant improvements, regardless of whether you or the tenant paid for them. Either way, these are considered part of the building and need to be factored into the building coverage amount.
Many tenants don’t think that they need building coverage since they don’t own the building. However, any build-outs or changes that you have done to the building will not be covered without building coverage on your policy. It is very common for tenants to do build outs on commercial buildings to create a space that better meets their needs.
Business Personal Property:
Business personal property includes things such as furniture, fixtures, machinery, equipment, stock, and leased personal property that you have a contractual responsibility to insure.
Coverage also extends to any other personal property owned by and used in the business.
Business Interruption Insurance:
In the event of direct damage to your building structure, you might suffer a loss in business income due to your business being unable to function as a result of damages. Business income insurance covers your business for your reduction in net income, plus helps cover your continuing operating expenses, including payroll and business expenses (the power and water bill don’t necessarily stop just because you’re not up and running).
If you have multiple locations, a blanket limit of coverage should be considered. With blanket coverage, a single limit of liability will apply for all types of property at all locations covered by the policy. If, for example, you had four locations, all with $2 million of business personal property, you could select a blanket limit of $8 million. In the event of a catastrophe at any one location, you would have up to $8 million for that specific location. Blanket limits can also be helpful in situations where inventory is moved between two or more locations.
To get the tailored policy coverage that you need for your business, call The CHOICE Insurance Team today at 757-416-5100 and ask for a free, comprehensive review. Give us a call today!
All the Best,
The CHOICE Team
In 2008 Choice Insurance Agency was created out of the former Realty Consultants Insurance Agency founded in 1980 by George Ayers Capt. USN Ret. Since 2008 the Choice Insurance Agency has more than tripled in size and is continue on a track of rapid growth. The Choice Insurance Agency focuses on four areas of expertise: Private Client Group, Coastal Coverage, Senior Programs and Commercial/Business Insurance. Our business model has allowed us to expand into all of the states on the Eastern Seaboard from New York to Florida including Pennsylvania and DC to better serve our ever-growing client base. As an Insurance brokerage stationed in Hampton Roads with access to well over 40+ insurance carriers, the Choice Insurance Agency is able to shop for the best rates, cover those picky coastal zones and create a tailored plan to fit your insurance needs. The Choice Insurance Agency. Call us today and see why we are the top “CHOICE” in Hampton Roads.