How to Get Small Business Equipment Insurance

Many small business owners make significant investments in equipment to help their businesses succeed. Since equipment often represents a large portion of a small business owner's assets, it makes sense to get protection for that investment by purchasing equipment insurance.

Difficulty: Easy

Instructions

1. Determine which equipment you wish to insure and the total sum required to replace it if it is damaged or destroyed. This is the amount of equipment insurance coverage you should purchase. Insured equipment can range from heavy-duty construction equipment to the cell phones the sales team uses to keep in touch.

2. Add up the cost of recovering computer data or other electronic information if your company relies heavily on such data storage. Many policies do not explicitly cover data recovery, and you may want to ask specifically for insurance against data loss.

3. Check with your current insurance agent or broker to determine whether she can provide the sort of equipment insurance your small business needs.

4. Request references and check credentials for any insurance agent or broker that you are considering purchasing insurance from but have not worked with previously. Since equipment insurance is notorious for covering damage or destruction only in specific circumstances, you need to work with an insurance provider who will be honest and go over the fine print with you.

5. Get coverage for the replacement cost of your equipment rather than the actual cash value (ACV) that many insurers offer. While ACV coverage is cheaper, you may not be able to cover the replacement cost of your equipment in the event of destruction.

6. Update your insurance rider when you get new equipment to ensure that your new purchase is covered.

Tips & Warnings

• Companies that use rented equipment should also consider insurance that is available for rentals. Many small businesses rent expensive equipment that they cannot afford to replace if a problem arises.
• Don't lose it all because of a disaster. Many types of disasters can be excluded from insurance. If you live in an area prone to a certain type of disaster, check carefully to be sure you get coverage for likely damage.
• Avoid the loss or destruction of your important insurance documents. Store your papers in a fireproof safe or in a safe-deposit box. Alternatively, you can scan your documents and have an Internet company store them for you online.