Business Contents Insurance Explained

Updated: 21/01/21

Business contents insurance is essential part of business insurance cover to reimburse you for the cost of replacing your business’s contents, stock or electronic equipment in the unfortunate event that it may be damaged or stolen.

The insurance can cover a range of items from as small as mobile phones and laptops, to office furniture, raw materials and large machinery. Should your business suffer a theft or attempted theft or is damaged in an unexpected event such as a fire, then your contents insurance will help to safeguard your ability to continue trading.

What does business contents insurance cover?

Most insurance providers cover items if damaged or destroyed in the event of:

• A fire
• Malicious damage
• Theft
• Explosion
• Extreme weather or natural disasters (such as storms or earthquakes)

When getting quotes for a business contents policy, you need to provide details of the value of the items which are owned by the business that you would like covered. This can include:

Furniture: such as desks, sofas, chairs
Electrical equipment: such as computers, printers, laptops, phones and TVs
Manufacturing equipment: any vital manufacturing equipment needed to do your work
Any contents stored in the business building: such as staff or client belongings

You can add extras to this insurance such as portable cover, tools insurance and more. It’s important to speak to your broker about what insurances are needed for your business.

Who needs business contents insurance?

Whether you run an office, retail outlet, pub, restaurant, hotel or factory, the value of your business contents is likely to be substantial, with a great deal of your assets being tied up in your premises. If these assets aren’t insured correctly, this could affect the day to day running and the immediate revenue of your business.

Business contents insurance coverage will differ from one provider to another, and they may offer specialist insurance for different industries, such as the retail industry, offices and surgeries, and home businesses. As well as your tangible assets, don’t forget that you are also able to insure for intangible assets such as patents, copyrights, and valuable business data on paper or computers, etc.

Cyber liability is another insurance coverage becoming more relevant and important than ever, this can provide indemnity in the event of a data breach or similar incident – This coverage can be vital for any business holding sensitive data, no matter how big or small.

How to value your stock and equipment

When taking out business contents insurance, you should always ensure it is insured for a replacement value rather than its initial purchase price. There may be certain times in the year when you know you will be holding more stock than normal, perhaps at Christmas. It is therefore important that your business contents insurance will cover this busier period too.

You may wish to insure specific high-value items separately but either way you need to make sure you don’t under-insure your business as this can leave you out of pocket. Be aware of any specialist equipment or machinery that may have significantly gone up in value since your original purchase and your need to replace like-for-like. With up to 80% of UK businesses being underinsured and 40% unable to re-open following disaster because of underinsurance this is a big issue.

Do I need business contents insurance?

You do not legally need business contents insurance; however, it is at your own risk if you don’t. If your business premises were to suffer significant damage, it can cost you thousands to replace, as well as the time you are unable to work due to the damage to existing and vital equipment.

Types of business contents insurance. There are two types of cover that you can insure your stock and equipment against:

Replacement as new policies will replace an item with a new one. Bluedrop Services offer the majority of their quotes on this reinstatement basis.

Indemnity policies or actual cash value will just pay for the cost of replacing the item at its current market value, taking into account depreciation and wear and tear.

It is important to carefully consider which form of cover is acceptable or required for your business and if you do simply require an agreed value basis then this can be discussed at the quote level.

Insuring your business equipment anywhere in the world

An ‘All Risks’ policy will provide cover for your portable equipment away from the office so it is not limited to your premises only. All risks cover can also be provided for specified items rather than all of your business contents, such as laptops, if you know they will be taken off the premises on a regular basis.

Is business contents insurance a substitute for business interruption insurance?

No. If any of your equipment or stock is damaged or destroyed then you will need to factor in the cost of replacing the items as well as any business income that you will lose as a result of the loss. Business Interruption cover is a separate form of insurance and accounts for any reduction in income or increase in cost of running in the event of damage and whilst waiting for repairs, replacements or re-builds of property.

Other FAQ’s

Can I cover my business contents on my home insurance?

No, you can’t cover any of your business items under your home insurance policy. Any computers, laptops, inventory that is owned by your business will not be covered by your standard home insurance. To ensure that your business is fully protected you will need purchase building contents insurance separately.

Can I insure my business contents and building in one policy?

Yes, if you own the building your business operates in, you can combine your buildings and contents insurance under one policy.

Do I need to pay to make a claim?

Yes, as with most insurance policies, there is an excess you will need to pay if you make a claim on your business contents insurance. The amount you pay is dependent on what you agree with your insurance provider.

A combined retail/office/leisure package can incorporate the business interruption cover with business contents, to form a comprehensive business package.

Click here for more information on Bluedrop’s commercial insurance or to get an online quote, or call the office on 01489 222 311