Property insurance insures against loss or damage to the location of the business and its contents. Property insurance can be for a specific risk (single peril) such as fire, or tornado specifically, or for a broader range of risks (broad form). The more risks your policy covers, the higher the premium will be.

Property insurance for small business is typically included in a package of needed insurances known as a business owner’s policy. This will typically be the best value for your money as long as you qualify.

Most property insurance policies can be modified by adding coverage (endorsements), subtracting coverage (exclusions), and specifying locations of coverage (schedules).

Property insurance can pay out for damages or loss based on one of these two ways:

• Actual Cash Value (ACV) – Actual Cash Value means that your loss or damage is valued using the actual cash value of the lost property (i.e. the amount in cash that you paid for it).

• Replacement Value – Replacement Value means that you are reimbursed the amount necessary to replace the lost equipment (i.e. the amount in cash that you will need to replace the property). Replacement value coverage typically carries higher premiums.

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