Commercial Property insurance is part of a Business Owners Policy that addresses critical property loss exposures of every IT company.
The Property policy provides protection for loss to your real property, tenant’s improvements and betterments, furniture, inventory, equipment, computer hardware and software, property of others at your premises, your property at the premises of others, your property in transit, etc. against loss caused by covered perils such as fire, windstorm, theft, vandalism, etc. The amount of coverage should be set to equal the replacement cost value of all of the above property.
Coverage should also be provided for business income and extra expense in the event that your premises are damaged by a covered loss and you lose income or incur extra expenses to get your business started back up again.
You need to verify that your Property policy has been customized to protect your valuable computer equipment, software, media, and data against perils such as artificially generated electrical power charges, magnetic injury, and mechanical breakdown. Please note that the basic Property policy does not protect against these perils unless it has been specifically endorsed.
Even if you are working out of your home, you still need a Property policy to protect property that is titled to your business against loss. The reason is that most Homeowner’s policies only provide up to $2,500 of coverage for your business personal property and they don’t provide adequate coverage for many of perils that can impact computer equipment.
Please note that almost all property policies exclude losses caused by flood, earthquake, artificially generated electrical power surges, and employee dishonesty.
Property insurance is also the only way to protect against damage to personal property of others (ex: you are working on computer hardware of others at your premises or client location) in your care, custody, or control. This exposure is not covered by a General Liability policy.
Property insurance is very inexpensive when packaged together with General Liability under a Business Owners policy. The cost for both policies combined is often as low as $500.