Property insurance covers a business's building and its contents -- money and securities, accounts-receivable
records, inventory, furniture, machinery, supplies and even intangible assets such as trademarks -- when damage, theft or
Some insurance companies offer property insurance by named peril, such as fire
and theft. Others offer policies that cover multiple perils. Most basic multiple-peril policies include losses caused by fire
and theft, but business owners can purchase additional types of coverage if they need it.
Businesses with good loss-control
measures and claim histories often pay lower insurance premiums than companies with risky procedures and poor claims histories.
Taking steps to prevent loss — hiring security personnel to prevent shoplifting, installing a sprinkler system to contain
fires or using an alarm system to protect against theft — can help control the cost of property insurance.
Many businesses purchase property insurance through a business-owner's policy (BOP), which bundles property and liability
insurance into one policy; however, since the amount of coverage available in a BOP is generally lower than in a standard
property-insurance policy, companies that require a lot of coverage usually stick with a separate policy.
BOPs also include business-interruption insurance and extra-expense insurance -- two types of optional coverage in a property
insurance policy that protect a business after a loss occurs.
provides payments for expenses such as salaries, taxes and debts, as well as any loss of profit due to the interruption of
Extra-expense insurance pays the costs of temporarily relocating a business when a
covered peril occurs. For example, if a fire destroys a clothing store, extra-expense insurance will pay for a business to
resume operations and cover such expenses as buying or leasing equipment, getting new merchandise and notifying customers
about changes that have occurred.