Anyone familiar with either a commercial property, business owners or commercial package policy has become acquainted with a limit known as Business Personal Property. This is coverage that protects a policyholder’s tangible, movable property that is necessary to business operations, in the event of a covered loss. That may seem like a straight-forward definition, however many business owners seek more clarification and ask, “What Materials Should Contribute to BPP Limits?”
First and foremost, the BPP limit should include any fixtures/ furniture used by the business on a daily basis and assists with profit production. For example, restaurants may want to include the cost of dining area furniture, work stations- both food prep and point of sale fixtures. A mechanic shop may include the cost of the counter where customer consultations take place as well as waiting room furniture. A barbershop owner will include all chairs, mirrors and stations in his shop. A real estate office may want to list all of the desks its agents use in its BPP limit. No matter what type of business is owned, most likely furniture is used to conduct business and the value of that furniture should be included in the BPP limit.
Secondly, but just as important, the BPP limit should include all merchandise the business has in stock to sell or tools used to provide the service of the business. For example, a pizza shop will want to include all ingredients, herbs, spices and cookware used in the production of the food it sells. A mechanic shop will want to include all tools, tool boxes and all inventory in stock to sell to customers. A barber will want to include all of the lotions, sprays and tools its barbers use at their stations in his BPP limit. Regardless of the type of business, the policyholder’s BPP limit should most certainly include all merchandise regularly stored at the business’s location and/or the tools the business’s employees use to service the customers.
Finally, policyholders should take into account the equipment their business utilizes. Whether computers, phones, fax machines, printers, ovens, deep fryers, electric clippers, car lifts, air pressure gages, freezers, mini-fridge for waiting areas, etc., businesses should ensure that their equipment is covered either through a BPP limit for loss from a covered cause, or through Equipment Breakdown coverage that will assist in loss due to power surges etc. Policyholders will also need to decide if they want to cover their property on actual cash value or replacement cost basis, as this will effect the way in which a policyholder is indemnified, should a loss occur.
Over the years, insurance companies have developed great insurance tools to ensure business owners are up and running quickly after a loss. Business owners need to take the time to ensure they are using these tools correctly, by providing the correct limits for BPP to be properly indemnified, should a loss occur. Contact your Beckerman agent today if clarification is needed on BPP limits.