What kind of coverage does my business need?
Not all business owner's policies cover the same risks. You'll want to look at coverages carefully to make sure you're getting what you need. Here are a few general tips:
Coverage for property loss should include the basic perils that can destroy your property (fire, theft, etc.) as well as any special perils that you're aware of. (Are you in an earthquake-prone area, a floodplain, a high-locust zone?) In assessing the risk of natural disasters like earthquakes and floods, you'll have to weigh the likelihood of their happening (does the river rise every five years? every fifty?) against the extra cost of the insurance. Also, depending on your situation, it may be important that the policy cover some other perils, such as damage from a burst pipe or smoke damage from a malfunctioning furnace.
As in homeowner's insurance, there are general levels of coverage built in to policies, with the more expensive covering the broadest range of hazards to your property. Specific form policies are the most comprehensive, and don't cost that much more.
If you own your property, you'll want coverage for everything you own, including the business property on the premises. You can try to negotiate to have the policy broadly written to cover some kinds of equipment and other property that you don't have now but might have in the future. Also, make sure the policy covers leased equipment, if the risk of its loss would fall on you. (Your lease might require you to insure it.)
Get a policy that gives you replacement cost coverage. That way, you'll get what you need to buy new property to replace the old.
Protection from liability covers you if someone does a swan dive in aisle three or steps in a hole in your parking lot. As in your homeowner's policy, the insurance company will defend you in court and pay damages up to the amount of insurance purchased.
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