Business Personal Property Insurance
Also known as BPP, business contents insurance, commercial contents coverage
The building is one thing. Everything you moved into it to actually run the business is another.
Business personal property insurance covers the movable, tangible things your business owns and uses to operate: inventory and stock, furniture and fixtures, machinery and equipment, computers and electronics, tools, and supplies. It responds when those contents are damaged, destroyed, or stolen in a covered event such as a fire, burglary, water loss, or storm. It is distinct from the building itself, which is commercial property or building insurance, and from the permanent improvements you made to a leased space, which is tenant improvements coverage. For a business that leases its space, business personal property is often the single most important property coverage, because the contents are what you actually own. It usually lives inside a commercial property policy or a business owners policy.
Reviewed for accuracy by Mark Hutchings, Licensed Insurance Producer (NV #3600994, CA #6003400).
Who needs Business Personal Property?
- Retailers and wholesalers whose inventory and stock represent a large share of their value
- Restaurants and bars with kitchen equipment, furniture, point-of-sale systems, and supplies
- Offices and professional firms with computers, servers, furniture, and equipment
- Contractors and trades with tools, materials, and equipment kept at a shop or yard
- Any business, especially a tenant, that owns physical property inside a space it does not own
What it covers
- Inventory, stock, and raw materials
- Furniture, fixtures, and shelving
- Machinery, equipment, and tools used in your operations
- Computers, servers, point-of-sale systems, and other electronics
- Supplies and other movable property you own and use in the business
- Property of others in your care and, within limited amounts, property temporarily off premises or in transit
What it doesn’t cover
- The building or structure itself, which is covered by commercial building insurance
- Permanent improvements you made to a leased space, which are covered by tenant improvements and betterments coverage
- Vehicles licensed for road use, which are covered by commercial auto insurance
- Money and securities, which are covered by commercial crime insurance
- Property regularly kept at other locations or moved between job sites beyond the policy sublimits, which often calls for inland marine coverage
- Flood and earthquake damage, and ordinary wear and tear, which are excluded or need separate coverage
Real claim scenarios
The overnight burglary
Thieves break into a Reno shop and clear out its computers, point-of-sale terminals, and a section of inventory. Business personal property coverage pays to replace the stolen equipment and stock, subject to the policy limit and deductible.
The fire that took the contents
An electrical fire sweeps through a leased office. The building is the landlord’s problem, but the tenant’s furniture, servers, and equipment are gone. Business personal property coverage funds replacing everything the business owned inside.
The burst pipe
A supply line fails over a weekend and floods a restaurant’s storeroom, ruining inventory, small equipment, and supplies. Business personal property coverage responds to the damaged contents.
Scenarios are illustrative; actual coverage depends on your policy terms.
How it’s priced
Business personal property is priced primarily around how much property you have and how well the building protects it. Carriers weigh the total value of your contents, whether you insure on a replacement cost or actual cash value basis, the construction and protection of the building, your location, and your limits and deductibles. Insuring to full value matters, because most property policies apply a coinsurance clause that penalizes under-insuring at the time of a claim.
- The total replacement value of your inventory, equipment, furniture, and other contents
- Whether coverage is written at replacement cost or actual cash value
- The construction, age, occupancy, and protection of the building you occupy
- Your location and its exposure to fire, theft, water, and weather
- The limits, deductibles, and any coinsurance provisions you select
- Protective safeguards such as alarms, sprinklers, and security systems
What to watch out for
- Insure to full replacement value, because coinsurance clauses reduce your payout if the limit is set too low when a loss happens
- Choose replacement cost over actual cash value where you can, since actual cash value subtracts depreciation and leaves you short on older equipment
- Account for seasonal swings, because inventory at peak season can far exceed your average and outrun a flat limit
- Watch the off-premises and in-transit sublimits, which are usually modest and may call for inland marine if you move property between locations
- Know what is excluded, since money and securities belong on a crime policy and licensed vehicles belong on commercial auto
Business Personal Property FAQs
Related coverages
We tailor Business Personal Property for: Food & Beverage, Commercial Real Estate, Construction & Contractors.
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