Little Known Business Property Insurance Facts

Business property insurance pays for damage when you lose physical assets due to unforeseen events such as fire, windstorm or flood. Your property insurance will pay to repair the damage. It will also cover the loss of valuable materials such as servers or legal files. Property insurance is among the most straightforward insurance coverage. Typically, you declare value of assets, and that value determines your coverage and premium. There are nuances, though, that you must understand to ensure you have the right coverage.

Exclusions Vary by Location

There are usually exclusions listed at the end of your business property insurance form. "Exclusions" is a term for those events or assets which are specifically named as "not covered" by your policy. Depending on where you are located, you will face different exclusions. For example, businesses along the Florida coast may have exclusions for windstorm. Businesses in California may have earthquake exclusions. Be aware of these issues. You will need to purchase add-on coverage to protect yourself in these cases. If you own a business with multiple offices, it is possible your policy will have an exclusion for only one location. A hotel chain in San Diego may be covered for fire damage at three locations but not at a fourth location in a fire hazard area.

Cover Damage to Other Property

What happens if your roof blows off and damages your neighbor's generator? This question will be answered in your policy under sections regarding damage to the property of others. You may be liable for at least a portion of these losses. If you live in a condensed, urban area, this coverage is essential. It is very common for buildings in a downtown to have an affect on each other. For example, a pipe could burst in your office and flood the tenant next door. If you live in an area without many neighbors, this will not be a primary concern. Still be aware of the property of visitors, though, such as guests who are parking in your lot.

Home Business Property Insurance is Tax Deductible

If you own a home business, you still need to be insured. Damage to your property will likely be covered in your home owner's policy. There are tax deductions to insure your business. To qualify, you must not have an alternate office. You must work solely from home. Determine which percentage of your home is a dedicated workspace. You can deduct the portion of your insurance, for example 10%, that covers the specific space you work in. If you are a renter, the same deductions can apply for your renter's insurance. Ask your accountant about possible deductions to receive accurate advice for your specific situation.


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