Important Tips for Your Business Property Insurance

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Purchasing Insurance
Insurance policies

Property insurance for your business protects your business from loss to the structure and contents of the business. Property coverage needs to be reviewed to determine if appropriate coverage is in place. Such a review should begin with the question: "Can I put the business back where it was before this disaster?"

All too often, business owners do not realize the business insurance in place is insufficient or exclusions in the policy limit coverage. When considering business property insurance, consider the following tips to eliminate some of the most common misunderstandings.

Tow Common Myths About Liability and Understanding the Value of Insurance

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Small Business Insurance
purchasing insurance
  Business Action Plan: The first question often asked by the business owner is: Do I need business insurance?
The answer is, “yes!”

In ten years as an attorney, I have always advised my business clients to obtain insurance for the risks and potential risks facing their business. In that time I have heard every rationale for why a business owner believes they do not need insurance. And, before we go on, I want to address the most common myths that lead some business owners to choose not to secure insurance.

Obtain Sufficient Coverage and Review Coverage Limits Annually at a MinimumBusiness property insurance coverage limits should be in an amount sufficient to rebuild the structure and replace fixtures at current replacement prices. This is not the same as a property tax valuation or valuation for real estate marketing purposes. Rather, it is the top down valuation of the the total cost of replacement. For example, a warehouse owner could call a local contractor and ask, "If I had to hire you tomorrow, without notice, to build me a 30,000 square foot warehouse with two loading docks, what would you charge me?" This estimate is a more accurate projection of needed coverage amounts. After a disaster, your business will not be in a position to shop around for good prices, supplies will be short, and your brother-in-law who can "build it cheap" probably is not an approved contractor. Overestimate if necessary.

Myth #1: Nobody will sue me, my business does not make a lot of money, and you “can’t squeeze blood from a turnip.” My business is not collectible.

FALSE. Everybody and every business can be sued. Everybody and every business, once a money judgment is rendered against them, can have thatjudgment collected. Judgment liens do not “go away”. Judgment liens can be renewed. Wages can be garnished. Equipment can be seized and sold. Bank accounts and assets can be seized to pay the judgment. Everybody is collectible at the hands of a persistent attorney.


Myth #2: My business is a corporation. The corporate format protects me from liability, so I don’t need insurance.
judgment collected. Judgment liens do not “go away”. Judgment liens can be renewed. Wages can be garnished. Equipment can be seized and sold. Bank accounts and assets can be seized to pay the judgment. Everybody is collectible at the hands of a persistent attorney.