Business Assets Insurance: Covering Your Investment

What is business assets insurance?

From accidental damage to theft or machinery breakdown, business assets insurance can cover everyone from small business owners to large multinational corporations against unforeseen accidental losses to physical business assets.

Business assets insurance, sometimes referred to as 'material damage insurance', is designed to cover assets such as stock, buildings, contents, fittings, fixtures, and equipment. It can come with an extensive range of automatic covers, such as employee effects, capital additions, and contents and stock anywhere in New Zealand.

Business assets insurance is a sub-type that may be included in a more general business insurance package. Other business insurance sub-types that are commonly packaged together include cover for motor vehicles, public liability, employers' liability, statutory liability, and loss of gross profit. There are many other insurances that you may need, so getting the right advice is important when setting up an insurance package for your business.

You can speak to an AMP advisor to understand which types of business cover apply to your situation.

Why should your business consider business assets insurance?

Physical assets can represent a large portion of the value of your business, therefore it's critical that they are covered.

Business assets insurance can be a more obvious choice for some businesses than others - for example, businesses that have high levels of plant and stock can have a more obvious exposure to insurable losses. If the premises, equipment or stock were to be damaged by fire, natural disaster, vandalism or any other event, the business could immediately feel the financial impact.

Business assets insurance can also be valuable to a smaller business with a backroom full of stock or even a consultant in a small office with some equipment. All businesses have assets of some description, and all businesses should understand the impact a loss would have on the financials of the business.

What does business assets insurance cover?

Business assets insurance is a form of cover that insures physical business assets in a range of situations. It is normally a subtype of cover within a business insurance package, often paired with policies that cover vehicles, liabilities and business interruption insurance (which covers loss of gross profit resulting from an insured loss on your business assets (also called material damage)).

Business assets insurance can cover the following:

• The repair or replacement of business assets: Cover for accidental and unforeseen loss or damage to business assets by events such as extreme weather, fire or other natural disasters.
  This generally comes in two forms - ‘reinstatement cover’ which repairs or replaces the asset to an ‘as-new’ condition, or ‘indemnity cover’ which covers the value of what the asset would have been just prior to the loss (in most cases this will involve establishing what the replacement value is and then depreciating according to what the value was just prior to the loss).
• Buildings and other permanent features: commercial property, service facilities, fences, paving, landscaping, and any fittings and fixtures, as well as key and lock replacement in cases of damage or unlawful duplication, may be covered.
  
• Stock, equipment and other contents: stock, machinery, tools, equipment, furnishings, fixtures, fittings and other impermanent features may be covered. This can even extend to items that are lost, stolen, or physically damaged while temporarily off-site.
  
• Professional fees: covers expenses accrued in the process of reinstating your business assets, such as architect and surveyor fees.
  

It’s important to note that depending on your policy, each of the events above may not be fully covered but rather covered up to the sum insured.

The specifics of any insurance cover will be outlined in the business insurance policy document, and it’s critical to understand the inclusions, exclusions and conditions. It’s always wise to get help from a professional, like an insurance broker or AMP advisor, to ensure you secure the right cover.

The information in this blog is of a general nature and does not constitute financial or other professional advice. Policy limits and exclusions apply - refer to the policy wording for full terms and conditions.