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Business Personal Property insurance

Business personal property insurance to value

You’ve built it, now protect it.

It took you years to develop a winning product or service, leverage hard-earned investment dollars, and build a prospering company.

As your business has grown, so have your tangible assets. Whether it’s the diagnostic equipment to examine your patients, the stamping press that shapes your parts or the computer servers that store your proprietary data, this tangible property is essential to your business. If disaster strikes, are you prepared to have it all quickly replaced at today’s costs? Replacement is more than just the purchase price, it involves making the purchase, then having it delivered, installed, tailored to your specific application and tested.

Business personal property – General guidelines

Replacement Cost (new) = The cost (new) of the same item or replacement item with equal utility including applicable taxes, delivery and installation charges.

3 Replacement Cost (new) is not Depreciated Asset Value.

3 Normally a lessee is responsible to insure equipment they lease.

3 Replacement Cost (new) is not the cost of used equipment.

3 Replacement Cost (new) is not Market Value or Liquidation Value.

“How did you get your values?”

There might be a problem if:

•     They’re derived from your Fixed Asset List

•     You don’t know and you’ve been increasing the equipment values you customized

•     Values are obtained from a Market Value Appraisal

Manufacturing operation example

There might be a problem if:

•     Your Building Value is higher than the

BPP/Machinery & Equipment Value

•     If one line or piece of equipment is a significant percentage of the total value of your assets

•     The majority of your assets were purchased used



In the event of a significant loss event, blanket limits of insurance may hide depressed values exposing business owners. Some business owners find their blanket limit of insurance values are understated by 50-75%, resulting in significant, unexpected out-of-pocket costs as insurance limits are exhausted.

For example, in a manufacturing operation the per square foot is the cost to replace a facility’s Business Personal Property and Machinery & Equipment (M&E) with items of like kind and quality. These values include installation, shipping and engineering throughout the plant.

M&E INCLUDES machinery, nonlicensed vehicles, conveyors, tanks, silos and support systems. M&E also includes patterns, fixtures, molds, dies, etc. located at your locations and in your care and custody. These cost ranges also encompass the main manufacturing areas, office space, warehouses, maintenance and other areas of the building excluding parking garages. These M&E ranges DO NOT include inventory that consists of raw materials, work in progress or finished goods.


Business Personal Property Insurance