Determining business personal property amount on a Business Owner policy for Design Professionals. There is not an exact science to how to determine the limits of business personal property on a policy, but here are some ideas to help in determining an amount to have on your business owner policy.
First, it is important to understand a few options for business personal property on the policy. The policy can either have actual cash value or replacement cost. Actual cash value is the replacement cost of the property, less the accumulated depreciate for age and wear. Replacement cost is the amount it takes to replace damaged or destroyed property. Your agent can provide quotes for each option.
The best way to determine what business personal property is is to visually take the office space and dump it upside down; anything that ‘falls out’ is the business personal property. This includes items such as computers, desks, lamps, artwork, leased property, equipment, phones, filing cabinets, etc. There are a few ways to determine the value.
Keep an inventory of all items. This can be done by keeping receipts of items purchased and a running list of all items in the office. It is a tedious task at first but once the list is set up it just needs to be updated from time to time. This gives the best idea of what the value of items are in the office since everything has been accounted for.
Property assessment for tax purposes is another option for business personal property. This is what the state will send you for tax reasons; it gives a dollar value to the business personal property of your business. This is determined by the government so they may not be aware of items purchased or sold over the course of the year. However, it can give a value amount that can be used on the policy.
Business personal property is important piece of your business and you want to make sure it is insured properly. Please call or email your PUI Agent with questions.