Property Coverage in a BOP

Buildings and business personal property

If you own the building, it can be insured for its replacement cost. Business personal property includes furniture, equipment, inventory and often improvements you made to leased space. Check your lease to see who insures what.

Off-premises and in-transit

Many BOPs include limited coverage for property away from the premises or in transit. If you regularly take equipment to job sites or events, ask whether a separate inland marine policy is needed.

Setting the property limits

The building limit should reflect what it would cost to rebuild at current prices, not the purchase price or tax assessment. For business personal property, total up furniture, equipment, computers, inventory at its peak level and improvements you paid for in a leased space. If your inventory swings with the seasons, ask about a seasonal increase or peak season provision.

Valuation and coinsurance

Most BOPs pay replacement cost for buildings and business property, though some items such as stock may be valued at cost. Some forms include a coinsurance or insurance-to-value condition that reduces a claim payment if the limit is too low, while others do not. Ask which applies to your quote.

Common additions inside the property section

• Equipment breakdown for HVAC, refrigeration and electrical systems
• Accounts receivable and valuable papers
• Outdoor signs
• Spoilage for businesses that keep perishables
• Employee dishonesty or crime coverage

Perils to ask about

Flood is normally excluded and earthquake is commonly excluded. In some coastal areas, wind or hail may have a separate percentage deductible or be excluded altogether, with coverage from a state plan or separate policy. Water backup from sewers or drains is often limited unless an endorsement is added.

Frequently asked questions