When reviewing your business insurance coverage, be sure to consider the valuation of personal property. While premiums for business personal property are created from the building coverage, the rate will also take into account the property's combustibility, flammability and damageabilty. For example, insuring paper products may be more expensive than insuring sheet metal.
Others issues to be taken into consideration are:
- Furniture and business trade fixtures usually found on your balance sheet, as depreciated capital investments must be considered at their current replacement costs.
- Equipment and machinery must be valued at replacement costs. A difficult-to-replace machine may cost more than anticipated and may increase the length of time your business is down.
- The cost to keep up with technology advances has increased even though the replacement cost of electronic data processing equipment continues to fall.
- Inventory valuation is based on the cost to replace at the time of the loss. Inventory may be in various stages from raw material, to finished goods held for sale. Research can take time depending on the nature of the operation.
