Once a business goes from being a back-of-a-napkin idea to an established brand or from being just a hobby to occupying a storefront, it’s time to invest in a BOP—Business Owners Policy. One of the most important parts of that coverage involves insuring your business’ property. Furnishings, computers, and specialized equipment can all add up, and a disaster such as fire, theft, or flood can end your business without coverage. Here's how taking a business inventory will help you get the right BOP.
What Is a Business Inventory?
A business inventory is a centralized list of all your business' property—generally tangible assets—complete with as much information about the objects (crucial data such as the item's name, condition, cost, date purchased, and serial number if applicable) and records, including receipts, leases, and documentation of conditional changes. The inventory includes purchased and leased property, even your building(s) or office space(s).
What Property Do You Include in a Business Inventory?
It can be daunting to think of everything you use for work and how much it’ll take to inventory. However, you’ll be surprised at how easy it goes once you break it down. Just like with a home inventory, you want to focus on big-ticket items. Below are some commonly insured types of property:
- Building (Owned or Leased): The space where you run your business. This can include other features like outbuildings, parking lots, etc. If you work from home, you may need a different policy.
- Exterior and Interior Fixtures: If you have significant signage, fencing, security cameras, or satellite dishes, include those, especially if exposed to weather or theft.
- Furniture: Things you have in bulk (such as desks, chairs, etc.) should be included in the inventory, even if they're leased.
- Electronics: Desktop computers, laptops, phone systems, work smartphones, point-of-sale (POS) systems, or other expensive, work-only devices.
- Specialty Equipment: If you own niche appliances for your business, these are probably some of the most critical pieces of property you own (and likely the hardest to replace).
- Bulk Supplies: While you shouldn’t inventory every paperclip or plastic fork, if you keep large amounts of bulk supplies or goods, those may be worth insuring, too.
How To Take a Business Inventory
Creating a business inventory list serves many purposes, such as tracking the properties associated with your business, keeping equipment maintenance schedules, and simplifying item storage. Here are some tips on how to start your business inventory list:
- Use a Digital Spreadsheet: Using a computer application like Microsoft Excel, Google Sheets, or a POS system is the easiest way to track your inventory. Save your documents to the cloud so you can access the inventory if your business premises are inaccessible.
- Record Relevant Contacts: At the top of the spreadsheet, add relevant contacts, such as who tends to the list, the vendors responsible for product delivery, and your insurance agent or carrier information.
- Identify the Important Data: Determine which information is crucial to your lists, such as item names, the condition of your equipment, the amount the items were purchased for, and the date they were bought.
- Take Inventory: The final step is filling in the spreadsheet with all the essential equipment and products on your premises. Enlist the help of employees to find out when this property was last serviced or maintained to ensure all information is accurate.
Whether your business is well established or you're just now reaching the point of wanting to turn your side hustle into a full-time gig, you’ll need to support this business inventory with the proper business owner's policy insurance. World Insurance can help you get your business ready to be insured and pair you with the best commercial insurance policies. Learn more by reaching out today.
This article is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.