How Do I Know If I Have Enough Business Insurance On Business Assets?
When you are starting your business, you might not have to worry about too many assets
, but it is important that you assess your insurance needs on a regular basis.
While many business owners will get the required general public liability or employers' liability when they first start their business, as business assets increase, so should the commercial contents cover on the business assets and equipment.
What many new business owners don't understand is that there are many business assets that need proper cover, yet they might not have given them proper consideration. You should base your business insurance cover on your needs, but when it comes to contents cover, you can choose between plant and business equipment insurance that offers a 'replacement as new' clause or an 'indemnity' basis.
The primary difference is that indemnity basis insurance cover might offer more affordable insurance premiums, but in the event of loss, the wear and tear will be taken into consideration when settling the claim, netting you a lesser amount.
This might not be sufficient if it is an older piece of expensive and crucial equipment. You need to think about business continuity so you should consider 'replacement as new' on your contents insurance cover.
Other business assets to consider might be your company stock, which should be insured for its cost price without profit. Money insurance to cover cash is on an 'all risks' basis, which will cover cash and other negotiable instruments. There can be different limit restrictions that apply to money on the premises during business hours and there might be certain policies that have requirements for safe key protocols and safe transport of the money to the bank, as well.
When you are considering theft cover, you also have to consider whether your contents cover will protect you from certain losses, including employee theft, because it usually requires additional insurance cover on a separate policy.
The important thing to understand is that building and property insurance should offer adequate protection. If you have products for sale in your retail location, you will need to cover your inventories on your contents cover, but if you have goods in transit, those should be considered, as well.
Another thing to think about on your business insurance cover is that your business premises are insured for the full rebuilding cost because market value might not be sufficient. You have to consider that there are demolition costs that are incurred before rebuilding and there can be other professional fees, like architects or designers.
For business owners, having the adequate protection means you don't have need to worry. For the business owners that aren't as diligent in assessing their business insurance needs, it can cost them a large part of their profits or more, if they don't have enough business property and contents cover. For this reason, you need to assess your insurance needs on a regular basis and especially as your business expands and grows. Having the proper commercial insurance cover can make a big difference in the future of your business, in the event an unforeseen event occurs.
by: Tom Jones
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