Much like you would benefit from keeping an accurate inventory of all of your belongings should your home be hit by a devastating storm, doing this for your small business can help when purchasing commercial insurance. Additionally, an inventory of your company’s assets could be helpful should you need to file an small business insurance claim.
The first step to creating an accurate inventory is to make a list of what is included as your property and any equipment that would need to be replaced if your company was affected by a storm or other event, such as theft or a fire. This can be done on traditional pen and paper, but you may benefit from keeping an online inventory or one that is accessible from outside of the office. Your paper inventory could be lost or ruined along with other assets if your property is severely hit, making the whole process of creating a list less beneficial. Some key things to include are vehicles, stand-alone property attributes, furniture, equipment and technology. You won’t likely need to include individual office supplies, however, a bulk shipment of printer ink or other expensive items used frequently may need to be included if you would need reimbursement.
Your business insurance policy will likely outline details of the reimbursement process, though most insure property and assets for their actual cash value, which will include depreciation, which could leave you at a financial loss, as these amount may be considerably less than the dollar amount spent on initial purchase of an item. You may be able to modify terms and conditions, though you should expect to pay more for extended coverage or increased limits. This is why it is important to write down the cost to replace each individual item on your inventory list. This can be done by comparing online prices across multiple retail markets, while you may also want to jot down how much you paid for the item initially. Updating your inventory list pricing regularly, such as once per quarter, can help keep you informed of the financial aspect of filing a claim through your commercial insurance provider.
Most basic business insurance policies will provide you reimbursement for funds lost when you can’t operate your company after it is affected by a storm or other natural disaster, but not every policy will include this. Be sure to review the details outlined in your terms and condition, and consider investing in a secondary insurance policy if this type of protection isn’t included in your BOP. This type of coverage is often referred to as business interruption insurance. To ensure you have the right amount of protection, add up costs that could be lost, such as employee pay.
Small businesses that keep products stored on the property will really need to keep an accurate inventory, and using a computerized system that can keep this up-to-date per sale will likely prove helpful. Stocks can vary, but completing an inventory from time to time will help keep your inventory list on point and ensure you have the proper amount of insurance.
Another time to update your inventory list is when your company acquires additional assets. Forgetting to include something on your inventory can be a costly mistake, so be sure to add receipts and other documentation of the purchase to your inventory shortly after it is bought and begins getting utilized in your office.