Property insurance can make you whole in the event you
sustain a loss to any business property, be it a truck, store
fixtures, inventory, raw materials, and so on. If possible,
you'll want to get "all risk" forms of insurance in
order to secure the broadest coverage available. Otherwise,
you'll have to insure each class of property with a separate
policy. "All risk" policies generally cover all perils
not explicitly excluded.
physical damage policies, whether for personal or business
vehicles, can cover collision damage as well as assorted perils
from fire, wind, hail, vandalism, and malicious mischief, as
long as you take out a "comprehensive" or extended
coverage policy. Collision insurance can be carried with a high
deductible, thus reducing premium costs significantly.
Cargo coverage can also be secured to cover the cost
of any losses to inventory or goods on board your company truck.
Crime insurance is designed to cover specific risks
you may have in your business. These can range from burglary
coverage for your safes to off-premises robbery of your
bookkeeper en route to make a bank deposit. Coverage can be
obtained to protect you against embezzlement, employee theft,
and inventory losses resulting from criminal activity as well as
a romantically titled risk known as "mysterious
disappearance." Crime insurance is generally quite
Fire and extended coverage: Basic fire policies are
standardized in the U.S. They cover fire and lightning but
exclude theft. Extended coverage is almost always purchased with
a standard fire policy. Comprehensive "all risk"
extended coverage is what you'll want for your business. These
policies cover hail, windstorm, and vandalism as well as fire.
Policies can be purchased that will also protect your accounts
receivable records, computer files, currency, securities, and
valuable papers. Flood losses, however, must be insured
separately. Flood coverage, naturally, varies depending on your
geographic location and hence cannot be standardized nationally.
Inland marine is a rather misleading name for a type
of coverage used to protect high risk, mobile items of stated
value that are not covered by your plain-vanilla commercial
property policies. Inland marine coverage can protect valuable
tools, for example, if you're a mechanic or tradesman, artwork
if you operate a gallery, or a jeweler's inventory.
The derivation of the name for this kind of
coverage comes from Lloyd's of London. Many,
many years ago, Lloyd's carried what was known
as marine insurance on all the cargo of incoming
and outgoing ships for British ports. The story
goes that a couple of the principals of the
firm, while sitting in a pub, were discussing
how they could continue to insure the cargoes
after they reached port and were shipped over
land to their ultimate destinations, thus
doubling their business. One principal noted
that "marine" insurance wouldn't quite
do to describe this new wrinkle, whereupon his
fellow principal suggested "inland
marine" as being an acceptable mutation.
And, of course, it stuck.
But the important thing to remember about inland marine
coverage is that it covers property in transit or mobile
property, whereas standard property insurance normally covers
items located within 100 feet of a specific physical address.
Your insurance professional can also meet individual needs
with rent insurance, fire sprinkler coverage, boiler, machinery,
and key-person policies. Always deal with a stable carrier and,
should you sustain a loss, document it thoroughly and report it
Once you have covered these basics, you'll be able to avoid
the most common pitfalls. You're still not immune to setbacks,
but you'll be well on your way to having a successful business.