Why Insuring Your Business Equipment Is A Smart Move
Dan Levenson September 22, 2016
Suppose a power surge in your office ruins or damages your business’s computer system. Or ask yourself: What could happen to your business if an employee error damages your only production machine? Even broken water pipes can cause a lot of damage.
You may not expect them, but any of these unfortunate events could happen to your business when you least expect it.
When you think about all of the risks that your company faces day to day, it’s easy to see why insuring your business equipment is a smart move.
What Does Business Insurance Protect?
Your business insurance protects your company and its equipment from a wide range of mishaps, from motor burnouts to power surges, from operator errors to boiler malfunctions.
It can also offer protection for damage to a number of important items, such as:
- Total or partial business interruption from a covered breakdown
- Expenses for replacing or repairing damaged equipment
- Costs for replacing spoiled materials or stock
- Costs for labor and time to replace or repair damaged or ruined equipment
- Other costs to speed the restoration of your business or limit your losses
- Electronic data
- Valuable records and papers
- Accounts receivable
- Damages from alteration or forgery
- Personal effects
- Accidental damages
- Tenant improvements
- Interruption of computer operations
Who Needs To Insure Their Business Equipment?
Most industries come with their own tools of the trade, and every industry has its own unique set of risks related to those tools. As a business owner, you need to be aware of those risks and prepare accordingly in case of a mishap.
Almost any business, small or large, needs to insure its business equipment, including:
- IT, data back-up companies, and computer hosting businesses
- Shopping centers and malls
- Hotels, inns, and spas
- Hospitals and medical facilities
- Condos and apartments
- Dental and doctor offices
- Office buildings
- Automobile repair shops
What If You Don’t Own Your Own Building?
If you don’t own the building your business is housed in, does that mean you don’t need the coverage?
No, you need the coverage just as much.
Suppose you operate a restaurant out of a building you lease. Imagine a power surge shorts out your electricity, shutting down your refrigerators for a couple of days, ruining your food in the process, and stopping the air conditioning or heat and lights.
The owner of the building will have to repair the electrical panel, but you have lost income and customers. Your insurance will help cover your financial losses.
Do You Need The Insurance For Something That Might Happen Off-Site?
Suppose you provide some kind of computer service to other businesses, but you depend on a server provided by someone else. Can you imagine that financial losses you might suffer if that server crashes? Equipment breakdown insurance would pay for lost income for your company.
Are Your Warranties And Property Insurance Enough to Protect You?
Most warranties only provide so much coverage, and standard commercial property insurance does not cover equipment breakdown.
Warranties only cover specific types of product failures. They are restrictive, and most new equipment is only covered for a limited specific amount of time.
In addition, they will not replace lost business income or any damage to your equipment caused by operator error, which is responsible for many equipment breakdowns.
How Business Equipment Insurance Protects You
There are a number of ways business equipment insurance protects your company.
- It covers your business equipment when it is in your office and even when you take some of it, such as a laptop or projector, on a business trip to a client’s office.
- It protects you as a tenant for improvements you make that you can’t legally move and take with you.
- Many policies do not deduct depreciation for damage to a computer, office furniture, server, or printer.
- Many policies cover personal effects at a business.
- Many policies cover damage to your business papers at your office and even provide a lesser amount of coverage if the damage happens elsewhere.
- You will be paid for any accounts receivable you can’t collect.
For more information on how you could benefit from insuring your business equipment, feel free to contact us.