Business personal property insurance might sound like a contradictory term (is it business or personal?), but it’s really a pretty simple coverage: it will pay out to repair or replace items you have in your place of business in case of damage or destruction.

What kind of property is covered?

In general, business personal property insurance covers any property in your building that isn’t permanently attached. Imagine a giant gorilla scooping your building up, turning it upside down, and shaking it. What would fall out? Broadly speaking, those items are what’s covered under business personal property.

It will also cover the property of others that’s in your care. For example, if your building burns down while you’re renting a few pieces of small equipment, this coverage will reimburse the rental company for the cost of replacing the equipment.

Finally—and less well known—if you rent your building and have made permanent improvements to it, business personal property insurance will cover the cost of replacing or repairing them if they are damaged in the event.

What kind of property isn’t covered?

Great question. Business personal property won’t cover any cars or trucks in your building—that’s what vehicle insurance is for. It also won’t cover any money or securities you store in the building, unless you purchase an optional coverage. Finally, it doesn’t cover your papers and records—so be sure to back up all your paperwork to the cloud.

Anything else to know about business personal property insurance?

Like many other insurance coverages, a business personal property policy won’t cover your property in the case of a natural disaster, such as an earthquake or a flood. You’ll need to purchase separate coverages for that. (For what it’s worth, this insurance also won’t cover you if your property is seized by the government.)

Also, it’s worth mentioning that this coverage doesn’t cover the building itself. If you own your building, you should consider purchasing business property coverage for your facility.

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