office property business personal property

What is Business Personal Property Insurance?

Business personal property insurance (BPP), also known as commercial property insurance,  is a type of insurance coverage option that provides business owners with financial protection in relation to their business personal property. It works to offset costs relating to the repair or replacement of equipment or personal property that may be lost, damaged, or stolen from your business.

Let’s dive deeper into business personal property insurance to discover what it covers, how it differs from other business insurance types, whether you need the policy type, and what your options are moving forward.

What Does Business Personal Property Insurance Cover?

BPP insurance covers a wide range of tangible assets including everything from office supplies to heavy machinery. Note that this specification means that to qualify for coverage, an asset must be something that can be physically seen or touched. Intangible assets like trademarks or patents also have value and need protection, but they are not eligible for coverage under most BPP policies as their value is harder to determine.

Here are just a few of the categories and items which may be covered under your BPP insurance plan:

  • Office supplies like pens, staplers, hole punchers, calculators, and paper
  • Furniture including desk chairs, desks, tables, armchairs, end tables, and others
  • Furnishings like curtains, rugs, built-ins, custom lighting, and throw pillows
  • Electronics including desktops, laptops, smartphones, tablets, monitors, and others
  • Heavy equipment like forklifts, 3D printers, and excavators
  • Inventory including goods, supplies, and merchandise you intend to sell

What Are My Business Personal Property Insurance Coverage Options?

Business personal property insurance only works to cover tangible items, and they can be insured in one of two main ways: by insuring it for their actual cash value or their replacement value.

If you choose to insure your property for its actual cash value, you’ll be insuring it for exactly what it is worth. This means if you have to replace a piece of equipment for actual cash value, your insurance company will do an evaluation of the item. They’ll determine the cost of replacing the item with a new one, and take into consideration key factors about your original piece of equipment including how old it was and how much it had been used to determine its depreciation.

Insuring your property for replacement value means that you’ll simply get the funds to purchase a new replacement. Note that this option is the more expensive choice for business owners to invest in because it requires higher payouts from the insurer.

Business Personal Property Insurance vs Business Owner’s Policy (BOP)

While BPPs and BOPs both work to provide you with financial assistance if your business faces damages, they do have a couple of key differences. First, while business personal property insurance works to protect only the movable assets you own in your business, business owners’ policies typically cover the entire structure of a business as well as any permanently installed structures. And second, BOPs usually come equipped with general liability coverage while BPPs do not. 

These policies work well together because they each work to protect different aspects of your tangible business without forcing you to purchase overlapping or duplicate insurance options.

Are Business Personal Property Policies Tax Deductible?

Yes, BPP insurance is a tax-deductible business expense. This means that any money you put toward payments on your business personal property insurance will not be taxed, which gives you access to more of your funds than you may otherwise receive.

Smaller companies and business owners specifically may want to take advantage of this benefit to both protect their assets and reduce their tax bills.

Who Needs Business Personal Property Insurance?

If your business has tangible assets, you probably need BPP insurance. This is especially true if your business would be greatly impacted by the loss of any of your property. For example, if you own a retail business selling jewelry or hardware, damages resulting from a fire or theft can seriously damage your bottom line. 

Similarly, if you are dependent on the use of specific equipment to get your work done, and your machine breaks, you won’t be able to work until it’s repaired or replaced. And if you don’t have sufficient savings to get your equipment back on track, you may be in trouble. 

How Much Will My Business Personal Property Insurance Cost?

As with most insurance types, the cost of your policy will depend on a number of factors that are subjective to you. These can include your industry and specific risks you face by the nature of your field, coverage limits, your location, and your business structure’s property value.