Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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business contents insurance

If you are considering opening a business, you may be wondering what exactly is business contents insurance. This is one of those little extras that are overlooked when working up an initial business plan, but it’s a vital part of the entire system.

Coverage is available from many different companies, and deciding on the ideal coverage for you can seem overwhelming. Here is what you need to know about business contents insurance, why you need it, what it will cover and how much you should get.

Ready to find the best rates on business contents insurance? Enter your zip code above to compare insurance quotes among all the top insurance companies in one place.

What is it Designed to Cover?

Business contents insurance is designed to cover your inventory and business related supplies. A bakery, for example, would have business contents insurance to cover the ovens, tables and other equipment as well as the food inventory that may be on hand at any given time. The contents are specifically defined as the items in a business that are moveable and can be readily damaged or stolen.

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Property Insurance

It’s important to understand that business insurance is not the same as homeowner’s insurance. Your homeowner’s insurance includes coverage for your personal property; business insurance does not. Property insurance for your business will cover the actual building, not the thousands of dollars in inventory or equipment you might have inside of that building.

Why it is Necessary

Accidents happen. People lose control of their cars and drive into buildings. Tornadoes and hurricanes can strike. Getting the building replaced after a natural disaster is vital, but if all the inventory and equipment is destroyed, can you really continue running your business?

What it should Cover

Here is a short checklist of what business content insurance should cover. Be sure to make a thorough list so you can get the coverage you need.

Business contents insurance

• Office equipment – It’s not just the desks and chairs. This also includes Internet connection hardware, shelves, filing cabinets and even the phone system.

• Manufacturing equipment – This equipment is necessary to your business and would be costly to replace. In addition to large pieces of equipment, be sure to also include those smaller items that are no less important to the overall ability to run the business.

• Inventory – Anything that is typically in the building or on the property and is waiting either for sale or to be crafted into an item that will be sold.

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Covered Events

Most companies will cover natural disasters and fallen trees. However, some companies may require a special rider to cover theft or smoke damage. When you are getting quotes for business contents insurance you will want to get a complete listing of covered events. The insurance is useless to you if they won’t be there when you need them.

Location Matters

Where your business is located will affect the types of events that are covered. Areas that are prone to theft and vandalism may be harder to get proper coverage in. Before deciding to open business doors in that cheap warehouse in the worst part of town, get some insurance quotes. The difference in premiums may allow you to move into a better part of town.

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Types of Coverage

There are different levels of coverage you can choose from. Understand each one so you can make an intelligent decision about the right coverage level for your business contents.

• Indemnity – Depreciation comes into play. If your computer is five years old then you can expect to receive enough money to purchase another five-year old computer.

• Replace as New – This coverage does not take depreciation into account and all items re covered at their full replacement value based on the cost of brand new items. This is ideal for anything that gets a lot of wear and tear, causing it to depreciate quickly.

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Adequate Insurance

It is vital that you have enough coverage. Remember that any insurance company will only provide reimbursement up to your stated maximum coverage levels. Consider the replacement values of your key pieces of equipment and add in the inventory that you typically have on hand at any given time.

Instant Payment or Delayed

The greatest deal on insurance premiums may have a catch. That catch is called reimbursement after the fact. Would you have enough liquid assets or credit to allow you to replace the items you need and then be reimbursed later? The other option is to choose a company that pays the claims up front and in a timely manner. Before signing with any company, find out how they will pay the claims.

Tips to Lower Rates

Of course, there are some ways you can get your business contents rates lowered. Here are some tips to help you bring the premiums down so you can put more money in your company.

• Updated security systems can help you get lower rates, especially if your business is in a rough area.

• Technological upgrades like climate controlled rooms for computer equipment are always looked on favorably.

• Upgraded sprinkler systems or fire detection systems in your building can also help you get a break on the premiums.

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What to Look For

When choosing this insurance, you will want to look at more than just the final premium. Consider how long the company has been in business and what types of events they are willing to cover. Look at their overall financial ratings from Standard & Poor’s or A.M. Best. Ultimately, you want to choose a company that will be there when you need them and will actually take care of any claims.

Finding the Best Rates

There are many companies offering business content insurance. Choosing the same provider for the building and contents might help you net an attractive discount. The key is to shop around, compare quotes and choose the company that offers you the most attractive package. You can quickly find the names of top companies in your area along with their rates, information on their policies and contact information by using our comparison tools.