Any time you’re preparing to make a significant purchase of new equipment for your business, you’ll have a good deal of research to do. You want to get the most for your money, and you want something that will do the job you need it to. You also need to make sure whatever you purchase is covered under your business insurance policies, as that’s the best way to protect your new investment as well as your company as a whole.
Many times, the new equipment you purchase can simply be added to your existing property insurance policy. Particularly if it’s replacing an older version of the same machine, you just need to make sure the policy is updated to reflect the new specifications and replacement costs. However, certain types of equipment fall into specialized categories that require their own particular coverages, and so it’s important to know if you have to purchase a new policy to add to your portfolio as well.
Boilers and heavy machinery are two good examples of equipment that is best covered through a specialized policy. This type of insurance takes into account the specific risks associated with these types of systems, and it will protect you from financial loss associated with breakdown or damage to them.
Another significant purchase that will require separate insurance is one involving a new vehicle for your business. Commercial auto insurance is required to cover vehicles owned by the company and used for business purposes, regardless of who is operating them, and so you will either need to get a new policy for the vehicle or add it to your existing commercial auto coverage.
When you add these new purchases to your business insurance, you should also find out whether they’re covered for actual cash value or replacement value. In general, the property owned by your business is essential to its functioning, and so you need to be able to replace it quickly when necessary.
This makes insuring for replacement value almost always the better option than for actual cash value, as the actual cash value of your used equipment will likely be much less than the cost to purchase a replacement. Premiums for actual cash value policies are often lower, however, and so if you feel confident you can replace a used machine with another one for something close to the actual cash value, it’s worth exploring that type of policy too.
Regardless of the nature of your purchase, it’s essential to ensure that it will be covered by your business policies. Our experts are available to walk you through the specifics of the coverages we offer, and we’ll work to make sure you’re always protected. To learn more, contact our offices today.