Written by Dylan Tate
Dylan Tate is an insurance content expert for SmartFinancial with 70+ articles about home, auto and life insurance under.
Edited by Dan Marticio
Dan Marticio is the content manager at SmartFinancial and has written 150+ articles across multiple insurance verticals.
Updated August 16, 2024Expert Reviewed
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Business personal property (BPP) coverage is a type of commercial insurance that covers furniture, equipment, inventory and other items owned by your business in case they are damaged or destroyed by sudden perils. You should be able to obtain BPP insurance by purchasing a standard business owners policy (BOP) but it may also be available as a separate policy.
Keep reading to learn more about business personal property insurance coverage including what perils it covers and how much it may add to your monthly business insurance premium.
Key Takeaways
Business personal property insurance is a subset of commercial property insurance that covers physical, portable property owned by your business. It is often automatically included in commercial property insurance policies as well as business owners policies (BOPs), though some insurers may also offer it as a standalone policy. [1]
While many businesses would likely benefit from a complete commercial property insurance policy, standalone BPP coverage may be particularly beneficial if you operate a home-based business since the structure of your house should already be covered by a homeowners insurance policy but the business contents you store inside of the house could be excluded from home insurance coverage.
Examples of items that may be covered by a business personal property insurance policy include the following: [1][2]
Upgrades and installations added to the office building
Tools and equipment
Furnishings like curtains and carpets
Computers and other electronic hardware
Accounts receivable documentation and other documents
Outdoor landscaping and structures like fences
These contents are generally covered while they are inside of your commercial building and when they are out in the open or in a car within 100 feet of the premises of your business. [1] Open peril BPP policies will insure your company’s personal property against any cause of loss that isn’t excluded by the policy. Conversely, named peril policies commonly provide coverage for only the following perils: [3]
Fire or lightning
Riot or civil commotion
Windstorm or hail
Automatic sprinkler leakage and some other types of water damage
Damage by aircraft
When you purchase business personal property coverage, you will have the option to insure your commercial contents at their actual cash value (ACV) or their replacement cost value (RCV). If any of your covered items are completely lost or destroyed due to a covered peril, an ACV policy will pay out the current market value of those items, which takes into account how they have depreciated since you first bought them.
Conversely, in the event of a total loss, an RCV policy will pay out whatever it would cost to replace the lost items with comparable items. Since RCV payouts are typically higher, these policies generally require a higher premium. You should note that some carriers require you to try to have damaged items fixed within six months of the damaging peril before they will agree to cover replacement items. [1]
Damage to your business property from floods and earthquakes is usually excluded unless you purchase additional coverage, while wear and tear and damage from war and nuclear hazards are considered uninsurable losses. Other commonly excluded perils include the following: [3]
A standalone BPP policy won’t cover the physical structure of your office building, although commercial building insurance should automatically be included if you buy a commercial property insurance policy or BOP. [4] Standalone BPP insurance also may not cover indirect losses such as lost income that results from the loss of your property. [1] However, this should be covered by business interruption insurance, which is typically included in BOPs and sometimes included in standalone commercial property insurance policies.
Finally, your business personal property insurance policy won’t cover property that is instead insured by a different type of commercial coverage. This includes in-transit items, which are covered by inland marine insurance, and vehicles, which are covered by commercial auto insurance. [5]
Business personal property insurance is important because it may prevent a major damaging peril from putting you in severe debt or out of business completely. While any business with physical property should maintain adequate BPP or commercial property coverage, the importance of it can vary based on your industry.
For example, a remote software developer whose work is saved entirely in the cloud may only be on the hook for replacing their laptop in the event of a damaging peril, which they may be able to afford to cover out of pocket. However, a retail store owner may be unable to financially recover from a peril that destroys all of their inventory without BPP insurance.
BPP insurance that includes business interruption coverage starts at $18 per month from NEXT Insurance, with exact premiums depending on details like the level of risk associated with your industry and the value of your business personal property. [6] Meanwhile, if you’re interested in more expansive coverage, you should note that many NEXT customers pay around $45 per month for commercial property insurance or $81 per month for a BOP. [7][8]
Many commercial property insurance policies include a coinsurance provision, meaning you should set your total coverage limit as at least a certain percentage of the total value of your business property, potentially ranging from 80% to 100%. [9]
As a result, if your BPP coverage limit is less than or equal to 70% of the total value of your business contents, then your insurer may not fully cover your claims even if the value of those claims is lower than the policy’s coverage limit.
Tangible personal property refers to physical items like furniture and equipment, while intangible personal property refers to things owned or rented by a business that cannot be physically interacted with such as patents, copyrights and other intellectual property rights, investments, partnerships and digital assets. [2] Since BPP insurance usually only covers direct physical losses, it generally won’t cover any losses involving intangible property. [1]
Shopping for business personal property insurance should involve analyzing quotes from three to five unique insurance carriers. You’ll need to provide insurance companies with information about your business like its industry, location, revenue and more. All of this can make for a tiresome process if you try to reach out to carriers one at a time.
That’s why the best option is to comparison shop through SmartFinancial. You’ll only need to answer a set of questions one time before we match you up with agents who can help you find the best BPP policy for your situation. Click here to speak with an agent about getting free commercial insurance quotes today.
Get a Free Business Insurance Quote Today!Business property insurance is recommended for any business owner with tangible personal property, especially one whose source of income is heavily tied to that property such as a retail store owner.
BPP coverage is only one small portion of a BOP, which typically also includes general liability , commercial building and business interruption insurance.
Business income coverage may be included in business personal property insurance but this is not the case with every insurance company. It may also be included if you purchase commercial property insurance or a BOP.
BPP value may refer to the total value of your business’ covered items or the cost of replacing all of them.
Dylan Tate is an insurance content expert for SmartFinancial with 70+ articles about home, auto and life insurance under his belt. He has over seven years of experience writing for online publications, primarily about gaming and esports. In the process, he has become an expert in search engine optimization, news reporting, feature writing and copy editing.
