This commercial insurance business personal property coverage along with the building property coverage, business income coverage, and extra expense coverage is usually written on the commercial property policy. This can be written on a stand-alone commercial property policy or it can be folded into a commercial package policy. Usually a package policy has two or more different lines of business coverages. The most common lines of business coverage are the general liability and property insurance combine together to make a package policy.
Business personal property is almost always covered within your insured building or outside the building on the premises but usually within 1,000 feet of the primary insured location. You do not necessarily have to own your business personal property. There’re many different categories of this type of property. Your property could be 100% financed by a bank and while they are the legal owner you still can provide business property insurance coverage. Many times businesses lease their business contents. Most common types of leased business personal property are the copy machine, the phone system or many different types of office equipment. In this era of the virtual office you could conceivably lease everything within your space. When you have a loan on your contents or the property you lease you will have to name the lessor and/or the bank as a loss payee on your property and provide the appropriate evidence of property insurance coverage.
Most businesses from time to time have personal property of others in their care custody or control. These items could be stored at their desk or work area or in a specific locker room storage location within the premises. You may or may not have any responsibility to provide reimbursement if employees personal property becomes damaged or stolen. Providing coverage for property of others will help alleviate that risk exposure. Property of others could also extend to your clients and customers if you are in a particular business that provides services for other people’s contents. Maybe you are providing repair or maintenance on their contents. While the client should have their own insurance protection for their personal property a business owner can sometimes be legally liable for the property that is within your care custody or control. This coverage can be afforded under the business personal property portion of the commercial property policy.
Usually in manufacturing businesses or distribution businesses the business personal property can transform into many different forms and shapes and locales. Business personal property which is of the inventory nature can increase in value from raw materials all the way through to the finished product. Having built-in protection for inventory fluxes as they increase from a work in progress standpoint can help prevent gaps in coverage and losses. In further articles we will explore the final two coverages of business income and extra expense.